A Model of Add-on Pricing

This paper examines a competitive model of add-on pricing, the practice of advertising low prices for one good in hopes of selling additional products (or a higher quality product) to consumers at a high price at the point of sale. The main conclusion is that add-on pricing softens price competition between firms and results in higher equilibrium profits.

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Year of publication:	2003-05
Authors:	Ellison, Glenn
Institutions:	National Bureau of Economic Research (NBER)

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Extent:	application/pdf
Series:	NBER Working Papers.
Type of publication:	Book / Working Paper
Notes:	IO published as Ellison, Glenn. "A Model Of Add-on Pricing," Quarterly Journal of Economics, 2005, v120(2,May), 585-637. Number 9721
Classification:	L13 - Oligopoly and Other Imperfect Markets ; M30 - Marketing and Advertising. General
Source:	RePEc - Research Papers in Economics

Persistent link: https://www.econbiz.de/10005580174