The operations literature has increasingly accounted for the presence of strategic consumer behavior. Theory suggests that such a behaviour exposes firms to intertemporal competition and exerts downwards pressure on prices. However, little evidence exists to demonstrate the outcome effect and...

We investigate the impact of strategic consumer behavior on retailers' dynamic pricing decisions. We present a stylized two-period model, and test the equilibrium predictions in a set of behavioral experiments in which human subjects played the role of pricing managers. Our main insight is that...