Selling substitute goods to loss-averse consumers: limited availability, bargains, and rip-offs

• 成果类型: Article
• 署名作者: Rosato, Antonio
• 署名单位: University of Technology Sydney
• 刊物名称: RAND JOURNAL OF ECONOMICS
• ISSN/ISSBN: 0741-6261
• DOI: 10.1111/1756-2171.12139
• 发表日期: 2016
• 页码: 709-733
• 关键词: price dispersion; demand; MODEL; preferences; COMPETITION; search; CHOICE; bait

摘要

This article derives the optimal pricing and product-availability strategies for a retailer selling two substitute goods to loss-averse consumers and shows that limited-availability sales manipulate consumers into an ex ante unfavorable purchase. The seller maximizes profits by raising the consumers' reference point through a tempting discount on a good available only in limited supply (the bargain), and cashing in with a high price on the other (the rip-off), which consumers buy if the bargain is not available to reduce their disappointment. The seller might prefer to offer a deal on the more valuable product, using it as a bait.