Self-confidence and survival.
Suntory and Toyota International Centres for Economics and Related Disciplines, London School of Economics and Political Science, London, UK.
We consider the impact of history on the survival of a monopolist selling single units in discrete time periods, whose quality is learned slowly. If the seller learns her own quality at the same rate as customers, a sufficiently bad run of luck could induce her to stop selling. When she knows her quality, a good seller never stops selling. Furthermore, a seller with positive, though imperfect, information sells for the same number of periods whether her information is private or public. We further consider the robustness of the central result when the seller's opportunities for strategic behaviour are limited.
||© 2001 Heski Bar-Isaac
||Reputation, signalling, learning, one-armed bandit, monopolist, private information, public information.
|Library of Congress subject classification:
||H Social Sciences > HF Commerce
|Journal of Economic Literature Classification System:
||L - Industrial Organization > L1 - Market Structure, Firm Strategy, and Market Performance > L15 - Information and Product Quality; Standardization and Compatibility
D - Microeconomics > D4 - Market Structure and Pricing > D42 - Monopoly
D - Microeconomics > D8 - Information, Knowledge, and Uncertainty > D83 - Search; Learning; Information and Knowledge; Communication; Belief
C - Mathematical and Quantitative Methods > C7 - Game Theory and Bargaining Theory > C73 - Stochastic and Dynamic Games; Evolutionary Games; Repeated Games
C - Mathematical and Quantitative Methods > C6 - Mathematical Methods and Programming > C61 - Optimization Techniques; Programming Models; Dynamic Analysis
||Collections > Economists Online
Research centres and groups > Suntory and Toyota International Centres for Economics and Related Disciplines (STICERD)
||11 Jul 2008 14:38
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