Loss leader pricing and rain check policies are common in retail markets, yet research on these topics is surprisingly scarce. In this paper, we study the effects of leader pricing and rain check policy on stores' profits and market outcomes. Suppose stores can accurately predict demand. Might...

We present a model that leads to an equilibrium with characteristics similar to the following stylized facts observed in retail markets: (a) Retailers advertise only selected brands; (b) Often low priced advertised brands are understocked; (c) In-store promotions are biased towards more expensive...

In our 1990 paper we demonstrated that a law prohibiting bait and switch may have the surprising consequence of hurting the consumers it was designed to protect. Wilkie, Mela, and Gundlach (1998) postulate that this may be false if upselling is equally effective when the bait brand is available...

This paper recommends that manufacturers consider a pull price promotion as a coordination device in an independent channel of distribution. Uncoordinated decisions of both manufacturer and retailer to charge high prices can break down the effort to expand the market, resulting in losses to the...