The posterior price matching policy, whereby a firm promises to reimburse the price difference to a customer who purchases a product before the firm marks it down, has been used in practice. The extensive literature has offered the following explanations why posterior price matching is adopted:...

In this paper, we study strategic capacity rationing when customers have boundedly rational expectations in the sense of anecdotal reasoning. Our S(K) model generalizes the existing literature by allowing customer expectations to be boundedly rational, and reduces to the rational-expectations...

The recent literature argues that offering consumer returns, such as money-back guarantees (MBGs), reduces quality differentiation in competitive markets. We show that this argument does not hold in general. We propose a new certainty-equivalent approach, which shows that offering product...