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Price Adjustment Policy with Partial Refunds

Dinah Cohen-Vernik and Amit Pazgal

Journal of Retailing, 2017, vol. 93, issue 4, 507-526

Abstract: Have you ever purchased an item only to notice a short while later that its price was reduced? Many retailers offer to refund customers the full price difference as long as the discount occurred within a short period of time after the original purchase. Such policy looks attractive to consumers as it shields them from future price fluctuations. But can this policy be advantageous for the retailer?

Keywords: Price adjustment; Price discrimination; Price protection; Best-price provision; Game theory (search for similar items in EconPapers)
Date: 2017
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Handle: RePEc:eee:jouret:v:93:y:2017:i:4:p:507-526