A utility-based model of sales competition with informative advertising

2014-12-16T13:30:51Z (GMT) by Sandro Shelegia Chris M. Wilson
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.