The behavioral implications of large discounts have been viewed from two opposing perspectives. From an attribution perspective, a large discount signals low quality and decreases the overall appeal of the product, but from a motivational account, a large discount seems attractive and increases...

The conventional wisdom in economic theory holds that switching costs make markets less competitive. This paper challenges this claim. We find that steady-state equilibrium prices may fall as switching costs are introduced into a simple model of dynamic price competition that allows for...

There is a substantial literature that documents the presence of state dependent utility with packaged goods data. Typically, a form of brand loyalty is detected whereby there is a higher probability of purchasing the same brand as has been purchased in the recent past. The economic significance...

We examine the value of price commitment in a nonprofit organization using individual level purchases over a series of concert performances. To decide on a pricing policy, the performing arts organization must be able to accurately measure when each ticket will be sold and what type of audience...

In the computing industry, computing systems typically consist of multiple components supplied by independent firms. An important feature of this industry is coopetition. In other words, firms must cooperate with each other in making a system work, but at the same time compete for dividing the...

Reinforcement learning (RL) based pricing algorithms have been shown to tacitly collude to set supra-competitive prices in oligopoly models of repeated price competition. We investigate the impact of ranking systems, a common feature of online marketplaces, on algorithmic collusion in prices. We...

In a typical sale model, retailers compete for informed consumers by changing prices in every period. Thus, if menu costs resist price adjustments, they prevent not only prices from equilibrating demands and supplies, but also retailers' competition. I investigate the effects of menu costs on...

If an upstream manufacturer can use coupons to price discriminate, the downstream retailer can also use coupons to price discriminate. In doing so, the retailer takes a share of the price discrimination profit from the manufacturer. To gain a larger profit share, the retailer has an incentive to...

An increasingly common practice among media platforms is to provide premium content versions with fewer or even no ads. This practice leads to an intriguing question: how should ad-financed media price discriminate through versioning? I develop a two-sided media model and illustrate that price...

Price-matching guarantees (PMGs) are offers to match or beat a competitor's price on a specific item. Such guarantees are extremely common in U.S. retail practice, and appear on their face to be very beneficial to consumers because they make an implicit promise to the consumer that she "won't...