Information Aggregation Under Strategic Delay

Economics Bulletin, Vol. 12, No. 23, pp. 1-8, 2008

Posted: 9 May 2009

See all articles by Hikmet Gunay

Hikmet Gunay

University of Manitoba; HIAS

Date Written: Aug 14, 2008

Abstract

In this paper, we show that consumers delay their buying to learn the unknown quality of a product. Agents receive imperfect but informative signals about the unknown quality. Then, each one simultaneously decides whether or not to buy the product in one of the two periods. Consumers with moderate tastes will strategically delay their buying to the second period even though they receive a good signal. They deduce the true quality by observing the mass of first period buyers. We avoid equilibrium non-existence problem by using agents with different private values.

Keywords: Intertemporal price discrimination, Strategic Delay, Quality, Learning

JEL Classification: L12, D42, D83

Suggested Citation

Gunay, Hikmet, Information Aggregation Under Strategic Delay (Aug 14, 2008). Economics Bulletin, Vol. 12, No. 23, pp. 1-8, 2008, Available at SSRN: https://ssrn.com/abstract=1401665

Hikmet Gunay (Contact Author)

University of Manitoba ( email )

Economics
Winnipeg R3T 5V5, Manitoba
Canada

HIAS ( email )

2-1 Naka Kunitachi-shi
Tokyo 186-8601
Japan

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