This paper presents a model of a rational seller who is actively learning the slope of his demand curve via his pricing strategy.  Consequently, this seller optimally experiments with his price.  Resulting price patterns show a lot of discreteness (as observed in the data), which has proved to...

In traditional industrial organization models of Bertrand supergames, the critical discount factor governing the sustainability of collusion is independent of key demand and supply parameters. Recent research has demonstrated that these counterintuitive results stem from the assumption that...