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Optimal advance selling discount strategy with future‐oriented consumers

Wen Zhang and Yi He

Managerial and Decision Economics, 2020, vol. 41, issue 3, 308-320

Abstract: This paper examines the advance selling decisions over two periods and considers future‐oriented consumers who are more concerned about the product quality than price discounts. We find that the advance selling strategy is not always best, and its merits are contingent on parameters of the market and consumers. Moreover, there is no need to set a deep advance selling discount for the retailer if consumers are highly risk averse. Next, we analyze the feasible advance selling pricing strategies for the retailer. Finally, we observe that the retailer can announce a higher advance selling price if consumers are moderately risk averse.

Date: 2020
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Handle: RePEc:wly:mgtdec:v:41:y:2020:i:3:p:308-320