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Fee or free? How much to add on for an add-on

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  • Gila Fruchter
  • Eitan Gerstner
  • Paul Dobson

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  • Gila Fruchter & Eitan Gerstner & Paul Dobson, 2011. "Fee or free? How much to add on for an add-on," Marketing Letters, Springer, vol. 22(1), pages 65-78, March.
    • Handle: RePEc:kap:mktlet:v:22:y:2011:i:1:p:65-78
    DOI: 10.1007/s11002-010-9112-3
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    References listed on IDEAS

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    1. Glenn Ellison, 2005. "A Model of Add-On Pricing," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 120(2), pages 585-637.
    2. Xavier Gabaix & David Laibson, 2018. "Shrouded attributes, consumer myopia and information suppression in competitive markets," Chapters, in: Victor J. Tremblay & Elizabeth Schroeder & Carol Horton Tremblay (ed.), Handbook of Behavioral Industrial Organization, chapter 3, pages 40-74, Edward Elgar Publishing.
    3. Lorin M. Hitt & Pei-yu Chen, 2005. "Bundling with Customer Self-Selection: A Simple Approach to Bundling Low-Marginal-Cost Goods," Management Science, INFORMS, vol. 51(10), pages 1481-1493, October.
    4. Kristina Shampanier & Nina Mazar & Dan Ariely, 2007. "Zero as a Special Price: The True Value of Free Products," Marketing Science, INFORMS, vol. 26(6), pages 742-757, 11-12.
    5. Lal, Rajiv & Matutes, Carmen, 1994. "Retail Pricing and Advertising Strategies," The Journal of Business, University of Chicago Press, vol. 67(3), pages 345-370, July.
    6. Goker Aydin & Serhan Ziya, 2008. "Pricing Promotional Products Under Upselling," Manufacturing & Service Operations Management, INFORMS, vol. 10(3), pages 360-376, June.
    7. R. Venkatesh & Wagner Kamakura, 2003. "Optimal Bundling and Pricing under a Monopoly: Contrasting Complements and Substitutes from Independently Valued Products," The Journal of Business, University of Chicago Press, vol. 76(2), pages 211-232, April.
    8. James D. Hess & Eitan Gerstner, 1987. "Loss Leader Pricing and Rain Check Policy," Marketing Science, INFORMS, vol. 6(4), pages 358-374.
    9. Jinhong Xie & Eitan Gerstner, 2007. "Service Escape: Profiting from Customer Cancellations," Marketing Science, INFORMS, vol. 26(1), pages 18-30, 01-02.
    10. William James Adams & Janet L. Yellen, 1976. "Commodity Bundling and the Burden of Monopoly," The Quarterly Journal of Economics, President and Fellows of Harvard College, vol. 90(3), pages 475-498.
    11. Timothy Gilbride & Joseph Guiltinan & Joel Urbany, 2008. "Framing effects in mixed price bundling," Marketing Letters, Springer, vol. 19(2), pages 125-139, June.
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    Citations

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    Cited by:

    1. Czerny, Achim I. & Zhang, Hanxiang, 2020. "Rivalry between airport ancillary and city-center supplies," Transportation Research Part E: Logistics and Transportation Review, Elsevier, vol. 141(C).
    2. Seung Hyun Lee & Jaeyong Lee, 2018. "Nickel and dime guests for amenities: exploring guests’ perceptions of resort fees," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 17(1), pages 20-31, February.
    3. Guofang Nan & Xingtao Li & Zan Zhang & Minqiang Li, 0. "Optimal pricing for new product entry under free strategy," Information Technology and Management, Springer, vol. 0, pages 1-19.
    4. Fiore, Alexander & Zanzalari, Danielle, 2023. "The competitive effects of product unbundling: Evidence from U.S. airlines," Journal of Air Transport Management, Elsevier, vol. 112(C).
    5. Guofang Nan & Xingtao Li & Zan Zhang & Minqiang Li, 2018. "Optimal pricing for new product entry under free strategy," Information Technology and Management, Springer, vol. 19(1), pages 1-19, March.
    6. Noppamash Suvachart, 2016. "Development of a scale to measure the factors of selecting the alternative accommodation," Proceedings of International Academic Conferences 4006239, International Institute of Social and Economic Sciences.
    7. Jihwan Moon & Steven M. Shugan, 2018. "Explaining Bundle-Framing Effects with Signaling Theory," Marketing Science, INFORMS, vol. 37(4), pages 668-681, August.
    8. Jan K. Brueckner & Darin N. Lee & Pierre M. Picard & Ethan Singer, 2015. "Product Unbundling in the Travel Industry: The Economics of Airline Bag Fees," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 24(3), pages 457-484, September.
    9. Adam Bockelie & Peter Belobaba, 2017. "Incorporating ancillary services in airline passenger choice models," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 16(6), pages 553-568, December.
    10. Kurata, Hisashi, 2019. "Is the information of customer types and preferences to personal selling worth the investment in innovative technology? A modeling approach," Journal of Retailing and Consumer Services, Elsevier, vol. 49(C), pages 371-379.
    11. Yao Cui & Izak Duenyas & Ozge Sahin, 2018. "Unbundling of Ancillary Service: How Does Price Discrimination of Main Service Matter?," Manufacturing & Service Operations Management, INFORMS, vol. 20(3), pages 455-466, July.
    12. Burman, Bidisha & Verma, Swati & Guha, Abhijit & Srivastava, Joydeep & Biswas, Abhijit, 2024. "Can a price discount Backfire? effects of the juxtaposition of Add-On fees and price discounts on consumer evaluations," Journal of Business Research, Elsevier, vol. 172(C).
    13. Lei He & Myongjin Kim & Qihong Liu, 2022. "Competitive response to unbundled services: An empirical look at Spirit Airlines," Journal of Economics & Management Strategy, Wiley Blackwell, vol. 31(1), pages 115-145, February.

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