Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/211150 
Authors: 
Year of Publication: 
2019
Series/Report no.: 
cemmap working paper No. CWP57/19
Publisher: 
Centre for Microdata Methods and Practice (cemmap), London
Abstract: 
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.
Subjects: 
Stochastic approximation
Statistical learning
Demand analysis
Persistent Identifier of the first edition: 
Document Type: 
Working Paper

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