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Fake Sales: A Dynamic Pricing Perspective

Garrett, Daniel F. (2019) Fake Sales: A Dynamic Pricing Perspective. Japanese Economic Review, 77 (3). pp. 375-382.

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Official URL: http://tse-fr.eu/pub/123495

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: Article
Language: English
Date: September 2019
Refereed: Yes
Uncontrolled Keywords: fake sales, dynamic pricing, value uncertainty
JEL Classification: D82 - Asymmetric and Private Information
L12 - Monopoly; Monopolization Strategies
Subjects: B- ECONOMIE ET FINANCE
Divisions: TSE-R (Toulouse)
Site: UT1
Date Deposited: 16 Apr 2020 09:35
Last Modified: 16 Apr 2020 09:35
["eprint_fieldname_oai_identifier" not defined]: oai:tse-fr.eu:123495
URI: http://publications.ut-capitole.fr/id/eprint/32755

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