Abstract
Intertemporal price discrimination is widespread. The internet has made stochastic delivery possible. We study the multiproduct monopoly pricing problem and show these sales strategies are isomorphic. We derive a sufficient condition for these advanced selling strategies to be profitable: the appropriate cross-partial derivative of the profit function must be negative. Hence we show that Stokey's (QJE 1979) celebrated no discrimination across time result does not extend to multiple goods in many classes of cases, including normal distributions of valuations. We show that profits can be increased by dynamic pricing for the cross-sell. Further, welfare can also be increased with the introduction of stochastic delivery or intertemporal price discrimination.
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