"This paper provides an economic analysis of marketing innovation. A dynamic duopoly model is developed to study two forms of marketing innovation: Gamma, which allows a firm to acquire consumer information effectively; and sigma, which reduces consumer transaction costs. The incentives and...

This paper studies the business practice of offering discounts to new customers in markets with switching costs. In a two-period homogeneous-good duopoly model, it is shown that the equilibrium amount of discounts increases continuously in the expected switching costs of a typical consumer. In...

With economies of scale, a vertically integrated firm can lower its upstream cost by supplying downstream competitors. The competitors may strategically choose not to purchase from the integrated firm, unless the latter's price for the intermediate good is sufficiently lower than those of...