Sales competition with heterogeneous firms

To better understand markets where firms use advertised sales, this paper presents a substantially generalized `clearinghouse' framework. The framework can permit multiple dimensions of form heterogeneity, and views firms as competing directly in utility rather than prices. As such, the paper can i) reproduce and extend many equilibria from the existing literature, ii) offer a range of new results on how firm heterogeneity affects market outcomes, iii) provide original insights into the number and type of firms that use advertised sales, and iv) offer a foundation to extend empirical procedures currently used in the study of sales and price dispersion.