Abstract

http://ssrn.com/abstract=5399
 
 

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Retail Pricing and Advertising Strategies


Rajiv Lal


Harvard Business School

Carmen Matutes


affiliation not provided to SSRN


JOURNAL OF BUSINESS, Vol 67 No 3, July 1994

Abstract:     
We study pricing and advertising strategies of retailers competing for the demand of an assortment of goods. In a model where uninformed rational consumers decide where to buy each product, we find that firms advertise prices below marginal cost to attract consumers into the store and profit from other goods which consumers plan to buy at the store. Incorporating product line decisions indicates that firms do not restrict their product assortment even when they make a loss on one of the goods. Finally, products with lower reservation prices are shown to be more natural candidates for loss-leader pricing.

JEL Classification: M37

Accepted Paper Series





Not Available For Download

Date posted: May 10, 2000  

Suggested Citation

Lal, Rajiv and Matutes, Carmen, Retail Pricing and Advertising Strategies. JOURNAL OF BUSINESS, Vol 67 No 3, July 1994. Available at SSRN: http://ssrn.com/abstract=5399

Contact Information

Rajiv Lal (Contact Author)
Harvard Business School ( email )
Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States
617-495-1257 (Phone)
617-496-5637 (Fax)
HOME PAGE: http://dor.hbs.edu/fi_redirect.jhtml?facInfo=bio&facEmId=rlal
Carmen Matutes
affiliation not provided to SSRN
Feedback to SSRN


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