We apply an indirect method to test for the extent of loss leader pricing. Specifically, the extent of loss leader pricing should increase with the profit from other regularly-priced items. Bookstores customarily use bestsellers as loss leaders. Among conventional bookstores, we found that the...

This chapter reviews economic analyses of privacy. We begin by scrutinizing the “free market” critique of privacy regulation. Welfare may be non-monotone in the quantity of information, hence there may be excessive incentive to collect information. This result applies to both non-productive...

We embed the Varian (1980) model in a broader setting that considers how switcher/loyal customer segments are determined. Generally, customer acquisition is deterministic while pricing is randomized. The equilibrium outcome depends on the timing of customer acquisition relative to pricing. If...

We introduce consumer avoidance into analytical marketing research. We show that consumer efforts to conceal themselves and to deflect marketing have a crucial impact on sellers¡¯ marketing strategy. Under reasonable conditions, seller marketing is a strategic complement with consumer...

Using a field experiment, we investigate whether, and if so, how spam is targeted. By comparing the spam rates among a set of synthetic email accounts, we find that spam is targeted to clients of particular email providers, users who declared interest in particular products or services, and...

We introduce the concept of marketing avoidance--consumer efforts to conceal themselves and to deflect marketing. The setting is one in which sellers market some item through solicitations to potential consumers, who differ in their benefit from the item and suffer harm from receiving...

Parallel imports are a significant academic and policy issue. Official investigations into the impact of parallel imports on music CD prices have reached widely conflicting conclusions. This note reports an event study on an international panel of changes in copyright law to permit or disallow...

We show that returns policies do increase manufacturer profitability by attenuating price competition between retailers. This effect holds only in the presence of end-user demand uncertainty. The conditions under which a returns policy raises the manufacturer's profit are weaker when retailing...

We investigate the incentives of a monopolistic seller to delay the introduction of a new and improved version of his product. By analyzing a three-period model, we show that the seller may prefer to delay introducing a new product, even though the enabling technologies for the product are...

This paper studies a vendor.s timing and pricing strategies to tackle its own installed base when selling a newly improved product. We characterize the market with either a partly- or fully- covered installed base, consumers. relative willingness to pay for the newly improved version of the...