To provide a more
exible workhorse model of temporary price reductions or
"sales", this paper presents a substantially generalized "clearinghouse" sales framework.
Our framework permits multiple dimensions of firm heterogeneity, and views
firms as competing directly in utility rather than prices. The paper i) reproduces
and extends many equilibria from the existing literature, ii) offers a range of new
results on how firm heterogeneity affects market outcomes, iii) provides original insights
into ...
To provide a more
exible workhorse model of temporary price reductions or
"sales", this paper presents a substantially generalized "clearinghouse" sales framework.
Our framework permits multiple dimensions of firm heterogeneity, and views
firms as competing directly in utility rather than prices. The paper i) reproduces
and extends many equilibria from the existing literature, ii) offers a range of new
results on how firm heterogeneity affects market outcomes, iii) provides original insights
into the number and type of firms that use sales, and iv) extends a "cleaning"
procedure that is commonly used in empirical studies of sales and price dispersion.
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