American Economic Journal:
Microeconomics
ISSN 1945-7669 (Print) | ISSN 1945-7685 (Online)
A Generalized Model of Advertised Sales
American Economic Journal: Microeconomics
vol. 13,
no. 1, February 2021
(pp. 195–223)
Abstract
To better understand temporary price reductions or "sales," this paper presents a generalized "clearinghouse" framework of advertised sales and explores some applications. By viewing the firms as competing in utility and amending the conventional tiebreak rule, we allow for multiple dimensions of firm heterogeneity in complex market environments. Moreover, we (i) provide original insights into the number and types of firms that use sales, (ii) offer new results on how firm heterogeneity affects market outcomes, (iii) extend a common empirical "cleaning" procedure, and (iv) analyze a family of activities in sales markets, including persuasive advertising and obfuscation.Citation
Shelegia, Sandro, and Chris M. Wilson. 2021. "A Generalized Model of Advertised Sales." American Economic Journal: Microeconomics, 13 (1): 195–223. DOI: 10.1257/mic.20170152Additional Materials
JEL Classification
- D21 Firm Behavior: Theory
- D43 Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection
- L13 Oligopoly and Other Imperfect Markets
- L25 Firm Performance: Size, Diversification, and Scope
- M37 Advertising
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