The authors study retail price promotions and manufacturer trade deals in markets with exclusive dealing. They find that models that do not account for the existence of retailers overestimate the depth of promotions. The authors then compare the price promotions outcomes of markets with and...

The authors study pricing and advertising strategies of retailers competing for the demand of an assortment of goods. In a model where uninformed rational consumers decide where to buy each product, they find that firms advertise prices below marginal cost to attract consumers into the store and...