A Generalized Model of Sales

Chris M. Wilson and Sandro Shelegia

No 934, Working Papers from Barcelona School of Economics

Abstract: To provide a more exible workhorse model of temporary price reductions or "sales", this paper presents a substantially generalized "clearinghouse" sales framework. Our framework permits multiple dimensions of firm heterogeneity, and views firms as competing directly in utility rather than prices. The paper i) reproduces and extends many equilibria from the existing literature, ii) offers a range of new results on how firm heterogeneity affects market outcomes, iii) provides original insights into the number and type of firms that use sales, and iv) extends a "cleaning" procedure that is commonly used in empirical studies of sales and price dispersion.

Keywords: sales; price dispersion; advertising; clearinghouse; heterogeneity (search for similar items in EconPapers)
JEL-codes: D43 L13 M3 (search for similar items in EconPapers)
Date: 2016-10
New Economics Papers: this item is included in nep-bec
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (7)

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Working Paper: A generalized model of sales (2016)
Working Paper: A Generalized Model of Sales (2016)
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Persistent link: https://EconPapers.repec.org/RePEc:bge:wpaper:934

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