Why Do Manufacturers Issue Coupons? An Empirical Analysis of Breakfast Cereals
AbstractWe explore the relationship between shelf prices and manufacturers' coupons for 25 ready-to-eat breakfast cereals. We find that shelf prices are lower during periods when coupons are available. This result is inconsistent with static monopoly price discrimination under a broad range of assumptions. We present evidence that is inconsistent with both dynamic theories of price discrimination and explanations of couponing based on the vertical relationship between manufacturers and retailers. We find support for models of price discrimination in oligopoly settings as well as suggestions that firmwide incentives may induce managers to use coupons and price cuts simultaneously. Finally, lagged coupons have a positive effect on current sales, suggesting that coupons are used to induce repurchase.
Download InfoTo our knowledge, this item is not available for download. To find whether it is available, there are three options:
1. Check below under "Related research" whether another version of this item is available online.
2. Check on the provider's web page whether it is in fact available.
3. Perform a search for a similarly titled item that would be available.
Bibliographic InfoArticle provided by The RAND Corporation in its journal RAND Journal of Economics.
Volume (Year): 33 (2002)
Issue (Month): 2 (Summer)
Contact details of provider:
Web page: http://www.rje.org
You can help add them by filling out this form.
CitEc Project, subscribe to its RSS feed for this item.
- STROUKAL Dominik, 2013. "Price Discrimination On The Marijuana Market: Schwag Or Endo?," Studies in Business and Economics, Lucian Blaga University of Sibiu, Faculty of Economic Sciences, vol. 8(2), pages 128-136, August.
- Rennhoff, Adam D. & Serfes, Konstantinos, 2009. "Retailer price distributions and promotional activities," Economics Letters, Elsevier, vol. 103(2), pages 91-95, May.
- Stole, Lars A., 2007. "Price Discrimination and Competition," Handbook of Industrial Organization, Elsevier.
- Hal R. Varian, 2010. "Computer Mediated Transactions," American Economic Review, American Economic Association, vol. 100(2), pages 1-10, May.
- Andrea Pozzi, 2012.
"Shopping Cost and Brand Exploration in Online Grocery,"
American Economic Journal: Microeconomics,
American Economic Association, vol. 4(3), pages 96-120, August.
- Andrea Pozzi, 2009. "Shopping Cost and Brand Exploration in Online Grocery," Working Papers 09-10, NET Institute, revised Sep 2009.
- Englmaier, Florian & Gratz, Linda & Reisinger, Markus, 2012. "Price Discrimination and Fairness Concerns," Discussion Papers in Economics 12735, University of Munich, Department of Economics.
- 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.
- Ganesh Iyer & P.B. Seetharaman, 2003. "To Price Discriminate or Not: Product Choice and the Selection Bias Problem," Quantitative Marketing and Economics, Springer, vol. 1(2), pages 155-178, June.
- Meghan Busse & Jorge Silva-Risso & Florian Zettelmeyer, 2006. "$1,000 Cash Back: The Pass-Through of Auto Manufacturer Promotions," American Economic Review, American Economic Association, vol. 96(4), pages 1253-1270, September.
- Udo Schmidt-Mohr & J. Villas-Boas, 2008. "Competitive product lines with quality constraints," Quantitative Marketing and Economics, Springer, vol. 6(1), pages 1-16, March.
For technical questions regarding this item, or to correct its authors, title, abstract, bibliographic or download information, contact: ().
If references are entirely missing, you can add them using this form.