Fashion and Sales

Susanna Sallstrom

CRIEFF Discussion Papers from Centre for Research into Industry, Enterprise, Finance and the Firm

Abstract: Optimal pricing of horizontally differentiated durable goods is shown to yield a high and declining price. In particular we show that the initial price will be higher the higher the positive correlation in consumer tastes. If everybody learns which variety is fashionable before the seller sets the initial price, fashionable goods have a higher initial price, and are sold out at a larger discount. Fashionable goods are, however, less likely to show up on sale. These results are based on the assumption that there is asymmetric information about consumer preferences. It is also crucial that goods are produced to stock.

Keywords: fashion; product differentiation; clearance sales (search for similar items in EconPapers)
JEL-codes: D11 D42 D82 L11 (search for similar items in EconPapers)
Date: 1998-10
References: Add references at CitEc
Citations:

There are no downloads for this item, see the EconPapers FAQ for hints about obtaining it.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:san:crieff:9820

Access Statistics for this paper

More papers in CRIEFF Discussion Papers from Centre for Research into Industry, Enterprise, Finance and the Firm Department of Economics, Castlecliffe, The Scores, St Andrews, KY16 9AZ. Contact information at EDIRC.
Bibliographic data for series maintained by Department of Economics, The University of St Andrews Business School ().