Purpose - In 2009, U.S. coupons set a new record of 367 billion coupons distributed. Yet, while coupon distribution is on the rise, redemption rates remain below 1%. This article shows how recognizing context variables, such as proximity, weather, part of town and financial incentives interplay...

The price discrimination literature typically makes the assumption of no consumer arbitrage. This assumption is increasingly violated in the digital economy, where coupons are traded with increased frequency online. In this paper, we analyze the welfare impacts of coupon trading using a modified...