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Returnable Goods: Refunds and Information Acquisition

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Author Info

  • Nicola Persico
  • Steven A. Matthews

Abstract

We present two information-based rationales for why sellers of returnable goods tend to offer refunds in excess of the salvage value of the good. Both explanations require at least the potential presence of consumers who can choose to learn their values for the good prior to purchasing.

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Bibliographic Info

Paper provided by Econometric Society in its series Econometric Society 2004 North American Summer Meetings with number 537.

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Date of creation: 11 Aug 2004
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Handle: RePEc:ecm:nasm04:537

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Keywords: refunds; information acquisition; warranties; monopoly pricing;

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