Information Aggregation Under Strategic Delay
Economics Bulletin, Vol. 12, No. 23, pp. 1-8, 2008
Posted: 9 May 2009
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
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