We consider the case of a monopolist supplying an improving durable product to a population that is heterogeneous in its valuation of product quality. In a two-period framework, we show that if consumers expect the product to improve in “present-value” terms, then intertemporal...

There are many critical concerns (including the accounting for endogeneity) when one is properly estimating response functions. However, it is sometimes (certainly not always) better to leave some variables exogenous when building mathematical models intended to help decision makers. The...

Marketing channel interactions typically feature three characteristics that have not been incorporated together in an analytic study: (1) the parties can do business repeatedly over time, often under different terms of trade (e.g., prices may vary), (2) the terms that the seller offers one buyer...

This paper analyzes optimal selling strategies of a monopolist facing forward-looking patient unit-demand bidders in a sequential auction market. Such a seller faces a fundamental choice between two selling regimes: selling that involves learning about remaining demand from early prices, and...

Although negotiating over prices with sellers is common in many markets such as automobiles, furniture, services, consumer electronics, etc., it is not clear how a haggling price policy can help a firm gain a strategic advantage or whether it is even sustainable in a competitive market. In this...

This paper explores channel coordination by a manufacturer that sells through competing retailers and that treats these retailers equally, as required by the Robinson-Patman Act. The authors show that, in general, there exists no single two-part tariff with a constant per-unit charge that will...

Reference groups influence product and brand evaluations, especially when the product is a publicly consumed luxury good. Marketers of such luxury goods need to carefully balance two important social forces: (1) the desire of leaders to distinguish themselves from followers and (2) the...

Conventional wisdom suggests that one of the goals of manufacturer advertising is to reduce the cross-price elasticity between products (make one's own and rivals' products appear to be substitutable in the eyes of consumers). Conventional wisdom also suggests that, all else being equal,...