Consumer sorting of vertically differentiated goods
This paper shows the conditions for consumer sorting to be profitable. Sorting of low quality goods dampens their substitutability with high quality goods and can raise firm's profit even when sorting lowers profit from low quality sales considered alone.
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- Ferrier Peyton M, 2007. "Cherry Picking: Should Sellers Let Buyers Sort?," Journal of Agricultural & Food Industrial Organization, De Gruyter, vol. 5(1), pages 1-32, December.
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