intertemporal price discrimination with forward looking consumers application to the us market for console video games harikesh nair1 september 2004 this version october 2006 abstract firms in durable good product markets face incentives intertemporally discriminate by setting high initial prices sell highest willingness pay and cutting thereafter appeal those lower a critical determinant of profitability such pricing policies is extent which anticipate future declines delay purchases we develop framework investigate empirically optimal over time firm selling strategic our model are equilibrium outcomes game played between who strategically avail that takes consumer behavior into account formulating its policy incorporates first method infer estimates demand under dynamic second an algorithm compute sequence given these solved using numerical programming techniques present empirical
