Fake Sales: A Dynamic Pricing Perspective

Garrett, Daniel F. (2019) Fake Sales: A Dynamic Pricing Perspective. TSE Working Paper, n. 19-1037, Toulouse

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Official URL: http://tse-fr.eu/pub/123494

Abstract

Some sellers display high "regular" prices, but mark down these prices the vast majority of
the time, advertising the good as "on sale" or "discounted". This note suggests a framework for understanding the practice, emphasizing the role of buyer uncertainty about their future valuations for the good. We argue that so-called "regular" prices set buyers' expectations regarding future prices, expectations that need not be tethered to the prices actually set. By manipulating upwards buyers' expectations of future prices, the seller can increase demand for the good at the current "sale" price, increasing profits

Item Type: Monograph (Working Paper)
Language: English
Date: September 2019
Place of Publication: Toulouse
Uncontrolled Keywords: fake sales, dynamic pricing, value uncertainty
JEL codes: D82 - Asymmetric and Private Information
L12 - Monopoly; Monopolization Strategies
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse)
Institution: Université Toulouse 1 Capitole
Site: UT1
Date Deposited: 16 Sep 2019 08:41
Last Modified: 16 Sep 2019 08:41
OAI ID: oai:tse-fr.eu:123494
URI: http://publications.ut-capitole.fr/id/eprint/32754

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