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Discount Pricing.

Abstract:

This paper investigates discount pricing, the common marketing practice whereby a price is listed as a discount from an earlier, or regular, price. We discuss two reasons why a discounted price - as opposed to a mearly low price - can make a rational consumer more willing to purchase the item. First, the information that the product was initially sold at a high price can indicate the product is high quality. Second, a discounted price can signal that the product is an unusual bargain, and ...

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Authors


Mark Armstrong More by this author
Yongmin Chen More by this author
Volume:
605
Series:
Discussion paper series
URN:
uuid:a1b7d5e6-d00d-4254-96bf-2cf6bd26c71c
Local pid:
oai:economics.ouls.ox.ac.uk:15398
Language:
English

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