The Timing of Sales

This paper presents a model of intertemporal price discrimination. A fixed number of sellers produce a homogeneous good. Consumers with different preferences enter the market in each period and leave when they make a purchase. The sellers typically vary their prices over time, charging a high price in most periods, but occasionally cutting the price to sell to a large group of customers with a low reservation price. In some equilibria, all stores lower their price at the same time and to the same level.