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A Utility-Based Model of Sales with Informative Advertising

Author

Listed:
  • Sandro Shelegia

    (University of Vienna, Austria)

  • Chris M Wilson

    (School of Business and Economics, Loughborough University)

Abstract

This paper presents a generalised framework to understand mixed-strategy sales behaviour with informative advertising. By introducing competition in the utility space into a clearinghouse sales model, we o er a highly tractable framework that can i) provide a novel welfare analysis of intra-personal price discrimination in sales markets, ii) characterise sales in a range of new contexts including complex market settings and situations where rms conduct sales with two-part tari s or non-price variables such as package size, and iii) synthesise past research and highlight its key forces and assumptions.

Suggested Citation

  • Sandro Shelegia & Chris M Wilson, 2014. "A Utility-Based Model of Sales with Informative Advertising," Discussion Paper Series 2014_09, Department of Economics, Loughborough University, revised Oct 2014.
  • Handle: RePEc:lbo:lbowps:2014_09
    as

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    References listed on IDEAS

    as
    1. Bliss, Christopher, 1988. "A Theory of Retail Pricing," Journal of Industrial Economics, Wiley Blackwell, vol. 36(4), pages 375-391, June.
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    8. Maarten C. W. Janssen & José Luis Moraga-González, 2004. "Strategic Pricing, Consumer Search and the Number of Firms," Review of Economic Studies, Oxford University Press, vol. 71(4), pages 1089-1118.
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    Full references (including those not matched with items on IDEAS)

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    More about this item

    Keywords

    Sales; Price Dispersion; Advertising; Clearinghouse; Utility Space; Intra-personal; Price Discrimination; Two-Part Tari s; Bonus Packs; Package Size;
    All these keywords.

    JEL classification:

    • L13 - Industrial Organization - - Market Structure, Firm Strategy, and Market Performance - - - Oligopoly and Other Imperfect Markets
    • D43 - Microeconomics - - Market Structure, Pricing, and Design - - - Oligopoly and Other Forms of Market Imperfection
    • M37 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Advertising
    • D83 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Search; Learning; Information and Knowledge; Communication; Belief; Unawareness

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