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Consumer uncertainty and price discrimination through online coupons: an empirical study of restaurants in Shanghai

Jie Zhang, Scott Savage and Yongmin Chen ()

MPRA Paper from University Library of Munich, Germany

Abstract: We use data from restaurants in Shanghai, China to conduct a new empirical analysis of prices and coupons. Our results show a positive relationship between prices and online coupons. Moreover, the price premium from couponing is higher for restaurants about which consumer values appear to be more uncertain. When consumer uncertainty is high, restaurants that offer coupons have an average price that is about 60 percent higher than similar restaurants that do not issue coupons. When uncertainty is low, restaurants that offer coupons have an average price that is about ten percent higher. These findings are consistent with online couponing in the restaurant industry being used for price discrimination and as a promotional device in the presence of higher uncertainty in consumer valuations.

Keywords: consumer uncertainty; coupons; price discrimination; price promotion (search for similar items in EconPapers)
JEL-codes: L66 L15 L86 (search for similar items in EconPapers)
Date: 2011-11-07
New Economics Papers: this item is included in nep-mkt
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Related works:
Journal Article: Consumer uncertainty and price discrimination through online coupons: An empirical study of restaurants in Shanghai (2015) Downloads
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