SHELAGIA, S. and WILSON, C.M., 2014. A utility-based model of sales competition with informative advertising. Loughborough University School of Business and Economics, WP 2014 – 09.
Economics Discussion Paper Series;WP 2014-09
This paper presents a generalised framework to understand mixed-strategy sales behaviour with informative advertising. By introducing competition in the utility space into a clearinghouse sales model, we offer a highly tractable framework that can i) provide a novel welfare analysis of intra-personal price discrimination in sales markets, ii) characterise sales in a range of new contexts including complex market settings and situations where firms conduct sales with two-part tariffs or non-price variables such as package size, and iii) synthesise past research and highlight its key forces and assumptions.
This is a working paper. It is also available at: http://www.lboro.ac.uk/departments/sbe/RePEc/lbo/lbowps/Shelegia_Wilson_WP_2014_09.pdf