Upselling is offering an additional product to a customer who just made a purchase. Most catalogers and online sellers in addition to some traditional retailers use upselling. One of the reasons that firms use upselling is to clear inventories of slow-moving items. We investigate the pricing and discounting questions for such an item, which we call the promotional product. In our model, an arri...

Letter of Credit is an international payment instrument whereby the issuing bank undertakes to pay the beneficiary, against presentation of certain stipulated documents, according to the conditions of the Letter of Credit. Discounting of LC for the short-term financing of the seller, due to the independent and irrevocable undertaking of the bank to make payment, is prevalent. Beneficiary gets t...

An open puzzle for climate-policy analysis is how policies could be made sensitive to climate change impacts spanning over centuries while keeping the shorterterm macroeconomic policies connected to the descriptive facts. We develop a tractable general-equilibrium model for climate-economy interactions with timedeclining pure discounting. The model resolves the puzzle: preferences over longterm...

Medicare Part D enrollees face a complicated decision: they dynamically choose prescription drug consumption in each period given difficult-to-find prices and a non-linear budget set. We use Part D claims data to estimate a flexible model of consumption that accounts for non-linear prices, dynamic responses, and salience. We use reduced form price responses from a linear regression of consumpti...

We use highly disaggregated data on trade in capital goods to study differences in the price of capital across countries. This strategy is motivated by the fact that most countries import the bulk of machinery equipment from a small number of industrialized countries. We find the price of imported capital goods to be negatively and significantly correlated with the income of the importing count...

Pricing series reflect multiple decisions (e.g., regular pricing and discounting) often made by multiple decision makers. For example, temporary price reductions (high frequency price changes) can be used to price discriminate in the short run, while regular price adjustments (low frequency price changes) reflect more strategic or long-term goals. It is therefore not implausible that the “react...

There is a long tradition in economics about the question of whether intergenerational discounting is fair or not. Ramsey (1928) was the first economist that criticized the discounting and mentioned that the just rate of discounting is zero.  In this paper it was tried to calculate the just rate of discounting for Iran with respect to Islamic thoughts. According to Islam, intergenerational just...