Unplanned Purchases and Retail Competition

Unplanned Purchases and Retail Competition

I propose a framework in which consumers have biased beliefs about their future purchase probabilities, leading them to make unplanned purchases. Using this framework, I examine the phenomenon of below-cost pricing and the welfare effects of banning it. When the market is covered, a ban on below-cost pricing raises social surplus, although consumers need not gain—they are only guaranteed to ben...

Retail competition and cooperative advertising

We consider a cooperative advertising channel consisting of a manufacturer selling its product through a retailer in competition with another independent retailer. The manufacturer subsidizes its retailer’s advertising only when a certain threshold is positive. Moreover, the manufacturer’s support for its retailer is higher under competition than in its absence.

eBay or Amazon? Time-Sensitive Retail Purchases via Auctions

We consider a population of buyers who have unit demand for a homogeneous good, and only differ in terms of how soon they need to purchase it. These buyers have access to a stochastic stream of second-price auctions, as well as a retail outlet that can be used at any time. We characterize the equilibrium bidding dynamics, showing that bidders steadily raise their reservation price as they appro...

Consignment contracts with retail competition

Consignment contracts have been widely employed in many industries. Under such contracts, items are sold at a retailer’s but the supplier retains the full ownership of the inventory until purchased by consumers; the supplier collects payment from the retailer based on actual units sold. We investigate how competition among retailers influences the supply chain decisions and profits under differ...

Competition in Retail Electricity Supply