Price skimming

[1] It has become a relatively common practice for managers in new and growing market, introducing prices high and dropping them over time.

The objective of a price skimming strategy is to capture the consumer surplus early in the product life cycle in order to exploit a monopolistic position or the low price sensitivity of innovators.

There are many real world examples of price skimming, especially in the technology market.

[8] Price skimming occurs for example in the luxury car and consumer electronics markets.

In an empirical study, Martin Spann, Marc Fischer and Gerard Tellis analyze the prevalence and choice of dynamic pricing strategies in a highly complex branded market, consisting of 663 products under 79 brand names of digital cameras.