ANOTHER LOOK AT PRICE PROMOTION
Publication in refereed journal

CUHK Authors
Author(s) no longer affiliated with CUHK


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AbstractWeekly sales at retail stores exhibit several patterns that the literature on price promotion does not fully capture. In this paper we develop a simple symmetric model where duopoly manufacturers distribute through a monopoly retailer to serve consumers with heterogeneous reservation prices. We show that the heterogeneity in consumers' reservation prices coupled with the retailer's market power is sufficient to resolve the deficiency in the literature. We then show that, while pricing patterns under this model differ significantly from those under a model where the retailer has no market power, the manufacturers' expected profits are the same in both cases.
All Author(s) ListCao W
Journal nameJournal of Industrial Economics
Year2011
Month6
Day1
Volume Number59
Issue Number2
PublisherWiley: 24 months
Pages282 - 295
ISSN0022-1821
LanguagesEnglish-United Kingdom
Web of Science Subject CategoriesBusiness & Economics; Business, Finance; BUSINESS, FINANCE; Economics; ECONOMICS

Last updated on 2021-26-02 at 00:16