Rhodes, Andrew (2015) Multiproduct Retailing. The Review Of Economic Studies, 82. pp. 360-390.
Full text not available from this repository.Abstract
We study the pricing behaviour of a multiproduct firm, when consumers must pay a search cost to learn its prices. Equilibrium prices are high, because consumers understand that visiting a store exposes them to a hold-up problem. However, a firm with more products charges lower prices, because it attracts consumers who are more price sensitive. Similarly, when a firm advertises a low price on one product, consumers rationally expect it to charge somewhat lower prices on its other products as well.We therefore find that having a large product range, and advertising a low price on one product, are substitute ways of building a “low-price image”. Finally, we show that in a competitive setting each product has a high regular price, with firms occasionally giving random discounts that are positively correlated across products.
Item Type: | Article |
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Language: | English |
Date: | 2015 |
Refereed: | Yes |
Uncontrolled Keywords: | Retailing, Multiproduct search, Advertising |
JEL Classification: | D83 - Search; Learning; Information and Knowledge; Communication; Belief M37 - Advertising |
Subjects: | B- ECONOMIE ET FINANCE |
Divisions: | TSE-R (Toulouse) |
Site: | UT1 |
Date Deposited: | 18 Apr 2016 11:25 |
Last Modified: | 27 Oct 2021 13:36 |
OAI Identifier: | oai:tse-fr.eu:27604 |
URI: | https://publications.ut-capitole.fr/id/eprint/19637 |