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Pricing Behavior of Multiproduct Retailers

  • Daniel Hosken and David Reiffen
Published/Copyright: November 1, 2007
The B.E. Journal of Theoretical Economics
From the journal The B.E. Journal of Theoretical Economics Volume 7 Issue 1

This paper develops a model of competition among multiproduct retailers that is consistent with observed pricing regularities, such as the facts that virtually all products have large mass points in their price distributions and that most deviations fall below these mass points. The basis of the model is that, when consumers prefer to buy a bundle of goods from the same retailer, a given discount on any one good in the bundle will have a similar effect on consumers' likelihood of visiting that retailer. Consequently, discounts on goods sold by a retailer are substitute instruments for attracting customers, and factors that influence one goods' price will also affect other goods' prices. Hence, if intertemporal price changes are a means of price discriminating (as the literature suggests), then the impact of these changes will be reflected in the prices of many goods - including those for which discrimination is infeasible.

Keywords: multiproduct retailing; pricing dynamics; sales
Published Online: 2007-11-1

©2011 Walter de Gruyter GmbH & Co. KG, Berlin/Boston

Articles in the same Issue

  1. Topics Article
  2. Equilibria in Multi-Unit Discriminatory Auctions
  3. A Note on Generating Globally Regular Indirect Utility Functions
  4. Value Maximization as an Ex-Post Consistent Firm Objective When Markets are Incomplete
  5. On Corruption and Institutions in Decentralized Economies
  6. Best Agendas in Multi-Issue Bargaining
  7. First-Degree Discrimination by a Duopoly: Pricing and Quality Choice
  8. Interbank Competition with Costly Screening
  9. Taxes versus Permits in a Two-Stage Duopoly
  10. The Many Faces of Rationalizability
  11. Cross and Double Cross: Comparative Statics in First Price and All Pay Auctions
  12. Price Interventions in a Cournot Oligopoly with a Dominant Firm
  13. Mixed Oligopoly under Demand Uncertainty
  14. Tacit Collusion in Capacity Investment: The Role of Capacity Exchanges
  15. Tax Differentials and the Segmentation of Networks of Cooperation in Oligopoly
  16. When Does Competition Lead to Efficient Investments?
  17. Herding with Costly Observation
  18. Asymmetric Nash Bargaining with Surprised Players
  19. Competing Gatekeepers
  20. Monotone Comparative Statics in Ordered Vector Spaces
  21. Pareto Optima and Competitive Equilibria with Moral Hazard and Financial Markets
  22. Decreasing Relative Risk Premium
  23. Advertising as a Distortion of Social Learning
  24. Pricing Behavior of Multiproduct Retailers
  25. Auctions with Opportunistic Experts
  26. A Consistent Multidimensional Generalization of the Pigou-Dalton Transfer Principle: An Analysis
  27. On the Effect of Risk Aversion in Two-Person, Two-State Finance Economies
  28. Contributions Article
  29. Information Goods Upgrades: Theory and Evidence
  30. Staged Financing with a Variable Return
  31. A Decentralized Market for a Perishable Good
  32. Effective Scrappage Subsidies
  33. Sunspot Rational Beliefs Structures, Equilibria and Excess Volatility
  34. Repeated Auctions with the Right of First Refusal
  35. A Herding Perspective on Global Games and Multiplicity
  36. Bribery and Favoritism by Auctioneers in Sealed-Bid Auctions
  37. Oligopoly, Endogenous Monopolist and Product Quality
  38. When Can Manipulations be Avoided in Two-Sided Matching Markets? -- Maximal Domain Results
  39. Free Cash Flow and Managerial Entrenchment: A Continuous-Time Stochastic Control-Theoretic Model
  40. Collective Punishments: Incentives and Examinations in Organisations
  41. Von Neumann-Morgenstern Stable Set Bridges Time-Preferences to the Nash Solution
  42. Information-Invariant Equilibria of Extensive Games
  43. Contests with Ties
  44. Local Network Effects and Complex Network Structure
  45. Advances Article
  46. Relating Network Structure to Diffusion Properties through Stochastic Dominance
  47. Firm Size, Productivity, and Manager Wages: A Job Assignment Approach
  48. Rule-Based and Case-Based Reasoning in Housing Prices
  49. Market Entry Dynamics with a Second-Mover Advantage
  50. The Compensation Principle and the National Income Test
https://doi.org/10.2202/1935-1704.1354
Keywords for this article
multiproduct retailing; pricing dynamics; sales

Articles in the same Issue

  1. Topics Article
  2. Equilibria in Multi-Unit Discriminatory Auctions
  3. A Note on Generating Globally Regular Indirect Utility Functions
  4. Value Maximization as an Ex-Post Consistent Firm Objective When Markets are Incomplete
  5. On Corruption and Institutions in Decentralized Economies
  6. Best Agendas in Multi-Issue Bargaining
  7. First-Degree Discrimination by a Duopoly: Pricing and Quality Choice
  8. Interbank Competition with Costly Screening
  9. Taxes versus Permits in a Two-Stage Duopoly
  10. The Many Faces of Rationalizability
  11. Cross and Double Cross: Comparative Statics in First Price and All Pay Auctions
  12. Price Interventions in a Cournot Oligopoly with a Dominant Firm
  13. Mixed Oligopoly under Demand Uncertainty
  14. Tacit Collusion in Capacity Investment: The Role of Capacity Exchanges
  15. Tax Differentials and the Segmentation of Networks of Cooperation in Oligopoly
  16. When Does Competition Lead to Efficient Investments?
  17. Herding with Costly Observation
  18. Asymmetric Nash Bargaining with Surprised Players
  19. Competing Gatekeepers
  20. Monotone Comparative Statics in Ordered Vector Spaces
  21. Pareto Optima and Competitive Equilibria with Moral Hazard and Financial Markets
  22. Decreasing Relative Risk Premium
  23. Advertising as a Distortion of Social Learning
  24. Pricing Behavior of Multiproduct Retailers
  25. Auctions with Opportunistic Experts
  26. A Consistent Multidimensional Generalization of the Pigou-Dalton Transfer Principle: An Analysis
  27. On the Effect of Risk Aversion in Two-Person, Two-State Finance Economies
  28. Contributions Article
  29. Information Goods Upgrades: Theory and Evidence
  30. Staged Financing with a Variable Return
  31. A Decentralized Market for a Perishable Good
  32. Effective Scrappage Subsidies
  33. Sunspot Rational Beliefs Structures, Equilibria and Excess Volatility
  34. Repeated Auctions with the Right of First Refusal
  35. A Herding Perspective on Global Games and Multiplicity
  36. Bribery and Favoritism by Auctioneers in Sealed-Bid Auctions
  37. Oligopoly, Endogenous Monopolist and Product Quality
  38. When Can Manipulations be Avoided in Two-Sided Matching Markets? -- Maximal Domain Results
  39. Free Cash Flow and Managerial Entrenchment: A Continuous-Time Stochastic Control-Theoretic Model
  40. Collective Punishments: Incentives and Examinations in Organisations
  41. Von Neumann-Morgenstern Stable Set Bridges Time-Preferences to the Nash Solution
  42. Information-Invariant Equilibria of Extensive Games
  43. Contests with Ties
  44. Local Network Effects and Complex Network Structure
  45. Advances Article
  46. Relating Network Structure to Diffusion Properties through Stochastic Dominance
  47. Firm Size, Productivity, and Manager Wages: A Job Assignment Approach
  48. Rule-Based and Case-Based Reasoning in Housing Prices
  49. Market Entry Dynamics with a Second-Mover Advantage
  50. The Compensation Principle and the National Income Test
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