We examine how retailers discount the prices of product systems versus their constituent components. The topic is important because such systems are ubiquitous in our daily lives. In particular, many high-tech markets revolve around complex multi-component systems – e.g. a camera system...

Pricing strategies may include the advertising of meeting-the-competition clauses (MCCs). We show in a specific spatial model scenario with differently informed consumers that MCCs primarily serve as a device to facilitate collusion instead of allowing for price discrimination between these...

Pricing strategies may include the advertising of meeting-the-competition clauses (MCCs). We show in a specific spatial model scenario with differently informed consumers that MCCs primarily serve as a device to facilitate collusion instead of allowing for price discrimination between these...

Motivated by recent trends in apps and electronic media, I study the pricing decision of a durable-goods monopolist to derive conditions under which freemium pricing is optimal. Under freemium pricing, the firm charges a price of zero for the durable good but offers optional micro-transactions...

The unprecedented access of firms to consumer level data not only facilitates more precisely targeted individual pricing but also alters firms' strategic incentives. We show that exclusive access to a list of consumers can provide incentives for a firm to endogenously assume the price leader's...

Prices that end with 9, also known as psychological price points, are common, comprising about 70% of the retail prices. They are also more rigid than other prices. We take advantage of a natural experiment to document an emergence of a new price ending that has the same effects as 9-endings. In...

We thank three anonymous referees for thoughtful comments and suggestions which we found very constructive and helpful. We are particularly grateful to the editor, Al Klevorick, for his advice and painstaking guidance through the multiple revision process. We thank Robert Barsky, Susanto Basu,...

The unprecedented access of firms to consumer level data facilitates more precisely targeted individual pricing. We study the incentives of a data broker to sell data about a segment of the market to three competing firms. The segment only includes a share of the consumers in the market around...

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...

We consider a firm that sells a product with a short life cycle to time-sensitive customers. The customers' product valuations decrease over time and they are grouped into different classes according to their delay sensitivities, the marginal decrease of their product valuation over time. The...