A consumer's decision to engage in search depends on the beliefs the consumer has about an unknown product characteristic such as price. In this paper, we elicit the distribution of price beliefs and explicitly study their role in a consumer's decision to search.
In this paper, we study within firm heterogeneity in the discounts offered to consumers. Utilizing transaction level data from a large home appliance retailer, we quantify the extent of both across and within-salesperson heterogeneity in the discounts they negotiate with consumers.
Retailers routinely allow consumers to negotiate a discount off the posted price for big-ticket items such as home appliances and automobiles, and on online platforms such as Amazon and eBay. The profitability of such a strategy, relative to selling only at posted prices, depends on consumers’ willingness to initiate a negotiation and ability to negotiate a discount. In this article, the authors incorporate consumers’ decision of whether to negotiate into a demand model.
We study differences in the effects of prices, non-price promotions, and brand line length on brand shares at different retail formats. Our conceptual framework rests on the presence of trip level fixed and category level variable utility components and shows how the trade-off between these components results in (i) different formats visited on different types of shopping trips; and (ii) differential marginal sensitivities of brand shares to changes in marketing mix variables across trip types.