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In this paper, we present a signalling-based explanation for the empirical phenomenon that a longer warranty may be offered by a product with lower quality. Our explanation hinges on differences in consumer knowledge about reliability of established and newer products. In a product market where...
Persistent link: https://www.econbiz.de/10009209028
Stiving (2000) proposes an interesting model to explain price-endings. His analysis shows that even when customer demand increases at 9-ending price points, certain firms that use high prices to signal quality are more likely to set those prices at round numbers. This comment raises two issues...
Persistent link: https://www.econbiz.de/10009214546
Forecast sharing is studied in a supply chain with a manufacturer that faces stochastic demand for a single product and a supplier that is the sole source for a critical component. The following sequence of events occurs: the manufacturer provides her initial forecast to the supplier along with...
Persistent link: https://www.econbiz.de/10009203778