Trade-ins and Introductory offers in a Monopoly

Details

Serval ID
serval:BIB_F2D43EDB3032
Type
Article: article from journal or magazin.
Collection
Publications
Title
Trade-ins and Introductory offers in a Monopoly
Journal
The RAND Journal of Economics
Author(s)
van Ackere A., Reyniers D.
ISSN
0741-6261
Publication state
Published
Issued date
1995
Peer-reviewed
Oui
Volume
26
Number
1
Pages
58-74
Language
english
Abstract
We model the commonly used marketing practices of offering discounts to either repeat buyers (trade-ins) or new buyers (introductory offers) of a quasi-durable good. We analyze these practices in terms of their potential for intertemporal and third-degree price discrimination. In our two-period model, the monopolist sets a first-period price that segments the second-period market optimally into holders and nonholders of the good. In the second period, different prices are quoted to the two market segments. We present three versions of the model with varying assumptions on consumers' rationality.
Keywords
Switching costs, durable goods, sales, markets
Web of science
Create date
02/06/2009 15:36
Last modification date
20/08/2019 17:20
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