Causes and Consequences of Price Premiums

JOURNAL OF BUSINESS, Vol. 69, No. 4, October 1996

Posted: 18 Sep 1996

See all articles by Akshay R. Rao

Akshay R. Rao

University of Minnesota - Twin Cities - Carlson School of Management

Kent B. Monroe

University of Illinois at Urbana-Champaign - Department of Business Administration

Abstract

Existing literature that argues for the prevalence of price premiums is examined. An evaluation of an extant model identifies several possible boundary conditions that limit its applicability. A set of propositions is developed based on these boundary conditions, linking buyer, seller and market factors to the magnitude of price premiums that should be available. Alternative means for empirical testing of the propositions are offered, and some implications and applications of this line of thinking for pricing and brand management are described.

JEL Classification: L1

Suggested Citation

Rao, Akshay R. and Monroe, Kent B., Causes and Consequences of Price Premiums. JOURNAL OF BUSINESS, Vol. 69, No. 4, October 1996. Available at SSRN: https://ssrn.com/abstract=4228

Akshay R. Rao (Contact Author)

University of Minnesota - Twin Cities - Carlson School of Management ( email )

19th Avenue South
Minneapolis, MN 55455
United States
612-624-8049 (Phone)

Kent B. Monroe

University of Illinois at Urbana-Champaign - Department of Business Administration ( email )

1206 South Sixth Street
Champaign, IL 61820
United States
Not Available (Phone)
Not Available (Fax)

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