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CW5719-The-ignorant-monopolist-redux.pdf
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The classical problem of the monopolist faced with an unknown demand curve is considered in a simple stochastic setting. Sequential pricing strategies designed to maximize discounted profits are shown to converge sufficiently rapidly that they leave the monopolist ignorant about all but the most local features of demand. The failure of the monopolist to “learn” his demand curve would seem to call into question some standard assumptions about agents’ grasp of their economic environment.
Authors
UCL
Working Paper details
- DOI
- 10.1920/wp.cem.2019.5719
- Publisher
- The IFS
Suggested citation
Koenker, R. (2019). The ignorant monopolist redux. London: The IFS. Available at: https://ifs.org.uk/publications/ignorant-monopolist-redux (accessed: 15 May 2024).
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