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Coupon Advertising Under Imperfect Price Information

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  • José Luis Moraga-González
  • Emmanuel Petrakis

Abstract

This paper studies sales promotions through coupons in an oligopoly under imperfect price information. Sellers can distribute either ordinary coupons, or coupon (price) advertising, or both types of coupons, at distant locations to attract consumers from their rivals' markets. A unique symmetric pure-strategy equilibrium exists where rebates and couponing intensity are always positive. In the ordinary-coupon equilibrium, prices, promotional efforts, and sellers' profits are higher than in the coupon-advertising equilibrium. However, if sellers are allowed to distribute both types of coupons, only coupon advertising is sent out in equilibrium. Copyright (c) 1999 Massachusetts Institute of Technology.

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Bibliographic Info

Article provided by Wiley Blackwell in its journal Journal of Economics & Management Strategy.

Volume (Year): 8 (1999)
Issue (Month): 4 (December)
Pages: 523-544

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Handle: RePEc:bla:jemstr:v:8:y:1999:i:4:p:523-544

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Web page: http://www.kellogg.northwestern.edu/research/journals/JEMS/

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Cited by:
  1. Galeotti, Andrea & Moraga-González, José Luis, 2008. "Segmentation, advertising and prices," International Journal of Industrial Organization, Elsevier, vol. 26(5), pages 1106-1119, September.
  2. Kutsal Dogan & Ernan Haruvy & Ram Rao, 2010. "Who should practice price discrimination using rebates in an asymmetric duopoly?," Quantitative Marketing and Economics, Springer, vol. 8(1), pages 61-90, March.

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