G2TT
来源类型Discussion paper
规范类型论文
来源IDDP10813
DP10813 Too Much Attention on Low Prices? Loss Leading in a Model of Sales with Salient Thinkers
Roman Inderst; Martin Obradovits
发表日期2015-09-06
出版年2015
语种英语
摘要Loss leading is analyzed in a model of promotions (as in Varian 1980) with limited consumer attention: (i) Consumers only compare prices of a selected number of products and (ii) they may pay more attention either to price or quality, depending on the salience of the respective attributes. When consumers have standard preferences, which is our benchmark case, manufacturers benefit when one-stop shopping induces retailers to discount their products, as this expands demand. Results are strikingly different when consumers are salient thinkers. When one-stop shopping or retail competition increases the scope for loss leading, manufacturers' profits decline and there may be an inefficient substitution to lower-quality products. In particular, shoppers who compare products may end up with a choice that is strictly inferior to that of non-shoppers who are locked in to a (local) retailer. Our analysis has implications both for competition policy, as we analyze the implications of a ban on loss leading, and for marketing, as we also analyze how salience affects retailers' product and promotion strategies.
主题Industrial Organization
关键词Limited attention Loss leading Manufacturer profits Product choice Promotions Quality choice Retailing Sales Salience
URLhttps://cepr.org/publications/dp10813
来源智库Centre for Economic Policy Research (United Kingdom)
资源类型智库出版物
条目标识符http://119.78.100.153/handle/2XGU8XDN/539642
推荐引用方式
GB/T 7714
Roman Inderst,Martin Obradovits. DP10813 Too Much Attention on Low Prices? Loss Leading in a Model of Sales with Salient Thinkers. 2015.
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