Jing, Bing; Wen, Zhong - 2005
The extant literature on price promotions typically assumes that consumers loyal to a brand never switch to a competing … brand, with Shilony (1977) and Raju et al (1990) being exceptions. Extending the Narasimhan (1988) model, we allow loyal … consumers to hold finite brand loyalty. Our unique equilibrium splits into three types, depending upon configurations of …