We investigate drivers of consumer purchase decisions when shopping experience goods online, using the context of expertise literature in business topics. Based on 60,000 books from Amazon.de, we test hypotheses on the effects of (1) “brand” characteristics (author’s background, reputation, experience, demographics), (2) product characteristics (publisher, price, page count, reading excerpts, c...

This paper studies the within model-year pricing and production of new automobiles. Using new monthly data on U.S. transaction prices we document that for the typical new vehicle, the retail price (net of rebates and financing incentives) falls 9.4 percent over the 17-month model year. Concurrently, both sales and inventories are hump-shaped. To explain these time-series, we formulate a market ...

Price discrimination offers sellers the possibility of increasing revenue by capturing a market’s consumer surplus: arising from the low price elasticity segment of customers that would have been prepared to pay more than the current market price. First degree price discrimination requires a seller to know the maximum (reserve) price that each consumer is willing to pay. Discouragingly, this in...

Auctions are increasingly being used to allocate emissions allowances (“permits”) for cap and trade and common-pool resource management programs. These auctions create thick markets that can provide important information about changes in current market conditions. This paper reports a laboratory experiment in which half of the bidders experienced unannounced increases in their willingness to pa...

We study intertemporal price discrimination when consumers can store for future consumption needs. To make the problem tractable we o¤er a simple model of demand dynamics, which we estimate using market level data. Optimal pricing involves temporary price reductions that enable sellers to discriminate between price sensitive consumers, who anticipate purchases for future consumption, and less p...

An extensive body of literature argues for the benefits of planned obsolescence, the strategy of designing products with low durability to induce repeat purchases from the consumers. Yet, some firms avoid planned obsolescence and instead offer products with high durability. In this paper, we offer a demand-side rationale for a high-durability product design strategy: exclusivity-seeking consume...

In this paper, we formulate a joint dynamic pricing and freshness-keeping effort strategy for perishable products in finite horizon. Based on the nature of products, paper considers product demand influenced by selling price, freshness stock level. Since level decreases with time, assume that deteriorates exponentially. Besides, is introduced to reduce deterioration rate freshness. Our purpose ...

An LA/AIDS model is developed to estimate demand elasticities for packages of 8-oz shredded cheese for higherand lower-income consumers. Data used in this study are scanner data for six supermarket stores in two distinct socioeconomic areas. Results show that: (1) lower-income shoppers are more price-sensitive than higher-income shoppers for both private labels and national brands; (2) compared...

We study interfirm price competition in the presence of horizontal and vertical intrafirm conflicts in each firm. Intrafirm conflicts are captured by a principal-agent framework with firms employing more than one agent and implementing a tournament incentive scheme. The principals offer premium incentives in the sense of revenue shares to which agents react by proposing a sales price. Introduci...

Modeling the demand for a portfolio of products as a function of price is a classical problem in operations with applications in retail and revenue management. Retailers have started to change their products’ prices frequently giving them access to vast amounts of data on aggregate sales at different price configurations. According to a recent Wall Street Journal article, the price of a microwa...