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Intertemporal Substitution and Storable Products


  • Igal Hendel

    (University of Wisconsin, Madison and NBER,)

  • Aviv Nevo

    (University of California, Berkeley and NBER,)


Storable products allow consumers to time their purchases to exploit price fluctuations. It has been documented that during promotions consumers buy more. The additional purchases are potentially intended not only for current use, but to be stockpiled for future consumption. This paper discusses the predictions of a consumer inventory model and reviews the available evidence. We then discuss the implications for demand estimation and present estimates of the economic magnitude of the dynamic effect of storability. (JEL: L0, L4, D1, D4) Copyright (c) 2004 The European Economic Association.

Suggested Citation

  • Igal Hendel & Aviv Nevo, 2004. "Intertemporal Substitution and Storable Products," Journal of the European Economic Association, MIT Press, vol. 2(2-3), pages 536-547, 04/05.
  • Handle: RePEc:tpr:jeurec:v:2:y:2004:i:2-3:p:536-547

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    References listed on IDEAS

    1. Paul R. Milgrom, 1985. "Auction Theory," Cowles Foundation Discussion Papers 779, Cowles Foundation for Research in Economics, Yale University.
    2. Lawrence M. Ausubel & Peter Cramton & Marek Pycia & Marzena Rostek & Marek Weretka, 2014. "Demand Reduction and Inefficiency in Multi-Unit Auctions," Review of Economic Studies, Oxford University Press, vol. 81(4), pages 1366-1400.
    3. Cramton Peter & Schwartz Jesse A, 2002. "Collusive Bidding in the FCC Spectrum Auctions," The B.E. Journal of Economic Analysis & Policy, De Gruyter, vol. 1(1), pages 1-20, December.
    4. Lawrence M. Ausubel & Peter Cramton & Wynne P. Jones, 2012. "System and Method for an Auction of Multiple Types of Items," Papers of Peter Cramton 11acjam, University of Maryland, Department of Economics - Peter Cramton, revised 2012.
    5. Milgrom,Paul, 2004. "Putting Auction Theory to Work," Cambridge Books, Cambridge University Press, number 9780521536721, March.
    6. Lawrence Ausubel & Peter Cramton, 2004. "Vickrey auctions with reserve pricing," Economic Theory, Springer;Society for the Advancement of Economic Theory (SAET), vol. 23(3), pages 493-505, March.
    7. William Vickrey, 1961. "Counterspeculation, Auctions, And Competitive Sealed Tenders," Journal of Finance, American Finance Association, vol. 16(1), pages 8-37, March.
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    Cited by:

    1. Victor Aguirregabiria & Victor Aguirregabiria & Aviv Nevo & Aviv Nevo, 2010. "Recent Developments in Empirical IO: Dynamic Demand and Dynamic Games," Working Papers tecipa-419, University of Toronto, Department of Economics.
    2. Pozzi, Andrea, 2013. "E-commerce as a stockpiling technology: Implications for consumer savings," International Journal of Industrial Organization, Elsevier, vol. 31(6), pages 677-689.
    3. Nikolaus Fink, 2016. "Formation and Adaptation of the Sugar Cartel in Austria–Hungary," WIFO Working Papers 508, WIFO.
    4. Anily, Shoshana & Hassin, Refael, 2013. "Pricing, replenishment, and timing of selling in a market with heterogeneous customers," International Journal of Production Economics, Elsevier, vol. 145(2), pages 672-682.
    5. David CASHIN & UNAYAMA Takashi, 2011. "The Intertemporal Substitution and Income Effects of a VAT Rate Increase: Evidence from Japan," Discussion papers 11045, Research Institute of Economy, Trade and Industry (RIETI).
    6. V. Kerry Smith & Sharon L. Harlan & Michael McLaen & Jacob Fishman & Carlos Valcarcel & Marcia Nation, 2015. "Compassion or Cash: Evaluating Survey Response Incentives and Valuing Public Goods," NBER Working Papers 21288, National Bureau of Economic Research, Inc.
    7. Stefano DellaVigna & Ulrike Malmendier, 2006. "Paying Not to Go to the Gym," American Economic Review, American Economic Association, vol. 96(3), pages 694-719, June.
    8. Antoniou, Fabio & Fiocco, Raffaele, 2018. "Strategic inventories under limited commitment," MPRA Paper 83928, University Library of Munich, Germany.
    9. David B. Cashin, 2017. "The Household Expenditure Response to a Consumption Tax Rate Increase," Finance and Economics Discussion Series 2017-035, Board of Governors of the Federal Reserve System (U.S.).

    More about this item

    JEL classification:

    • L0 - Industrial Organization - - General
    • L4 - Industrial Organization - - Antitrust Issues and Policies
    • D1 - Microeconomics - - Household Behavior
    • D4 - Microeconomics - - Market Structure, Pricing, and Design


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