Strategic pricing under quality signaling and imitation behaviors in supply chains

We consider a firm producing and selling experience products over two periods with private quality information. Consumers strategically decide their purchasing timing driven by the imitation effect, and the firm chooses pricing policy (dynamic or preannounced) and equilibrium type (separating or pooling, through which true quality information is revealed). Results imply that the firm prefers preannounced pricing but consumers prefer dynamic pricing. Under both pricing schemes, the first-period price decreases but the second-period price increases with the imitation effect. A pooling-pooling equilibrium is always preferred, unless the firm is farsighted and the imitation effect is weak under dynamic pricing.