Intertemporal price discrimination and competition

In this study we investigate the impact of competition on markets for non-durable goods where intertemporal price discrimination is possible We develop a simple model of different potential scenarios for intertemporal price discrimination and implement it in a laboratory experiment We compare the outcomes in monopolies and duopolies. Surprisingly, we find that competition does not necessarily prevent intertemporal price discrimination, as our model predicts However, competition generally reduces sales prices. but by far less than theory predicts As expected - but not predicted by our simple model - competition increases efficiency. (C) 2009 Elsevier B.V All rights reserved