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...

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...

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...

We consider a dynamic oligopoly on the beer market and study the differential effects of switching costs on product prices, market shares, and profits. Our demand estimation results show large differences in brand loyalty, and switching costs across customer income segments and beer brands. Our...

Although rebates are widely employed, redemption is not effort-free, and the hassle of redemption is an important decision variable for buyers. The current research examines the impact of hassle cost on optimal rebate strategy. An analytical model is developed that simultaneously determines the...

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...

Potential customers' willingness to pay (WTP) for a new product can be affected by their observing a posted price and this can be modeled in terms of an anchoring mechanism. A theoretical argument and mathematical proof is developed, showing that if customers use an asymmetric WTP anchoring...

Retailers often offer price and quantity promotions to customers during clearance sales. In a price promotion, they offer discounted unit prices. In a quantity promotion, they usually offer a buy-one-get-one free (BOGO) or buy-two-get-one free (BTGO) policy. Under BOGO, customers buying one unit...