A Theory of Clearance Sales.
Clearance sales are widely used by firms as an intertemporal selling policy, in particular in markets where firms face demand uncertainty and need to choose capacity in advance. Clearance sales consist in charging a high price initially but then lowering the price in the sales period. High-valuation...
| Main Authors: | , |
|---|---|
| Format: | Journal article |
| Language: | English |
| Published: |
Wiley-Blackwell
2007
|
| _version_ | 1826298421361770496 |
|---|---|
| author | Nocke, V Peitz, M |
| author_facet | Nocke, V Peitz, M |
| author_sort | Nocke, V |
| collection | OXFORD |
| description | Clearance sales are widely used by firms as an intertemporal selling policy, in particular in markets where firms face demand uncertainty and need to choose capacity in advance. Clearance sales consist in charging a high price initially but then lowering the price in the sales period. High-valuation consumers purchase the good at the high initial price so as to avoid rationing at the low price, while low-valuation consumers wait for the price to drop. We develop a simple model of intertemporal monopoly pricing under demand uncertainty, and show that clearance sales may be the optimal intertemporal selling policy. |
| first_indexed | 2024-03-07T04:46:34Z |
| format | Journal article |
| id | oxford-uuid:d3823b5d-f455-4027-bf0c-1534a94da6b9 |
| institution | University of Oxford |
| language | English |
| last_indexed | 2024-03-07T04:46:34Z |
| publishDate | 2007 |
| publisher | Wiley-Blackwell |
| record_format | dspace |
| spelling | oxford-uuid:d3823b5d-f455-4027-bf0c-1534a94da6b92022-03-27T08:11:35ZA Theory of Clearance Sales.Journal articlehttp://purl.org/coar/resource_type/c_dcae04bcuuid:d3823b5d-f455-4027-bf0c-1534a94da6b9EnglishDepartment of Economics - ePrintsWiley-Blackwell2007Nocke, VPeitz, MClearance sales are widely used by firms as an intertemporal selling policy, in particular in markets where firms face demand uncertainty and need to choose capacity in advance. Clearance sales consist in charging a high price initially but then lowering the price in the sales period. High-valuation consumers purchase the good at the high initial price so as to avoid rationing at the low price, while low-valuation consumers wait for the price to drop. We develop a simple model of intertemporal monopoly pricing under demand uncertainty, and show that clearance sales may be the optimal intertemporal selling policy. |
| spellingShingle | Nocke, V Peitz, M A Theory of Clearance Sales. |
| title | A Theory of Clearance Sales. |
| title_full | A Theory of Clearance Sales. |
| title_fullStr | A Theory of Clearance Sales. |
| title_full_unstemmed | A Theory of Clearance Sales. |
| title_short | A Theory of Clearance Sales. |
| title_sort | theory of clearance sales |
| work_keys_str_mv | AT nockev atheoryofclearancesales AT peitzm atheoryofclearancesales AT nockev theoryofclearancesales AT peitzm theoryofclearancesales |