A Generalized Model of Advertised Sales

Sandro Shelegia and Chris M. Wilson

American Economic Journal: Microeconomics, 2021, vol. 13, issue 1, 195-223

Abstract: To better understand temporary price reductions or "sales," this paper presents a generalized "clearinghouse" framework of advertised sales and explores some applications. By viewing the firms as competing in utility and amending the conventional tiebreak rule, we allow for multiple dimensions of firm heterogeneity in complex market environments. Moreover, we (i) provide original insights into the number and types of firms that use sales, (ii) offer new results on how firm heterogeneity affects market outcomes, (iii) extend a common empirical "cleaning" procedure, and (iv) analyze a family of activities in sales markets, including persuasive advertising and obfuscation.

JEL-codes: D21 D43 L13 L25 M37 (search for similar items in EconPapers)
Date: 2021
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Citations: View citations in EconPapers (1)

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Working Paper: A Generalized Model of Advertised Sales (2019)
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DOI: 10.1257/mic.20170152

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