Increased sales due to promotions could be at the expense of competitors: such sales come from consumers with relatively weak brand preferences. However, increased sales from brand loyal consumers could well cannibalize sales of the promoted brand. An unintended consequence of promotions is that...

An examination of brand prices in several categories reveals that the distribution of prices is multimodal, with firms offering shallow and deep discounts. Another interesting feature of these distributions is that they may have holes in the interior of the support. These pricing distributions...

Firms that must choose capacity in advance of observing uncertain or time varying demand sometimes have more inventory than their full price customers will consume. By pricing a limited quantity at below market clearing rates, “rationed promotions” allow sellers to recruit enough excess...

Merchants are wary of a platform entering as a competitor and adversely affecting sales and margins. A platform wanting to maximize profits is interested also in gaining consumer trust and confidence by providing credible quality information to consumers. As a practical matter, could a...

Price discrimination is generally thought to improve firm profits by allowing firms to extract more consumer surplus. In competition, however, price discrimination may also be costly to the firm because restrictive incentive compatibility conditions may allow the competing firm to gain market...