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We propose a consistent utility-based framework to jointly explain a household's decisions on purchase incidence, brand … in the product category and brand switching, but the effect through larger purchase quantities is limited. …
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According to standard economic wisdom, fixed costs should not matter for pricing decisions. However, outside economics, it is widely accepted that firms need to increase their prices after a fixed cost rise. In this note, we show that a liquidity-constrained firm that maximizes lifetime profits...
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