This paper examines the phenomenon of profit-increasing consumer exit and the related phenomenon of profit-decreasing consumer entry. We demonstrate that firms can be better off in shrinking markets and worse off in growing markets, even in the absence of competitive entry or exit. Specifically,...

Consider a retailer announces both the regular price and the post-season clearance price at the beginning of the selling season. Throughout the season, customers arrive in accord with a Poisson process. In this paper we analyze the impact of two types of customer purchasing behavior and two...