Learning, Forgetting, and Sales

Sofia Villas-Boas () and Miguel Villas-Boas
Additional contact information
Miguel Villas-Boas: University of Californa, Berkeley
Authors registered in the RePEc Author Service: J. Miguel Villas-Boas

No 1020, Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series from Department of Agricultural & Resource Economics, UC Berkeley

Abstract: Sellers of almost any product or service rarely keep their prices constant through time, and frequently offer price discounts or sales. This paper investigates an explanation of sales as a way for uninformed consumers to be willing to experience the product, and learn about its fit, and where informed consumers may forget about (or change) their preferences. We investigate the role of the rate of forgetting on the timing between sales, and of the rate of learning and menu costs on the length of a sale. We also investigate the effect of a seller carrying multiple products on the pattern of sales. Using price series from supermarket categories, and given the assumed simplified preference structure, we obtain empirical estimates of the rates of learning and forgetting, and of the other model parameters.

Date: 2006-06-01
Note: oai:cdlib1:are_ucb-1118
View list of references

Downloads: (external link)
http://repositories.cdlib.org/cgi/viewcontent.cgi?article=1118&context=are_ucb (application/pdf)

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: http://EconPapers.repec.org/RePEc:cdl:agrebk:1020

Access Statistics for this paper

More papers in Department of Agricultural & Resource Economics, UC Berkeley, Working Paper Series from Department of Agricultural & Resource Economics, UC Berkeley
Contact information at EDIRC.
Series data maintained by Christopher F. Baum ().