"Will That Be Pickup or Delivery?": An Alternative Spatial Pricing Strategy
AbstractThis article demonstrates that when consumers are offered a choice between pickup and delivery, a firm can increase profits relative to the case when no choice is tendered, as in the mill or uniform spatial pricing models. Further, this choice yields a lower level of welfare than that obtained under mill pricing. These results hold in models where market size is endogenous as well as exogenous to the firm's decisions, and with tastes and technology that are fairly standard in the spatial literature.
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Bibliographic InfoArticle provided by The RAND Corporation in its journal Bell Journal of Economics.
Volume (Year): 14 (1983)
Issue (Month): 1 (Spring)
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Web page: http://www.rje.org
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