Trade-ins and introductory offers in a monopoly
Article Abstract:
Trade discounts are marketing tools designed to attract new customers or encourage repeat purchases from old clients. The former discount is termed as an introductory offer, while the latter is referred to as trade-ins. A two-period model of a monopoly firm that examines the use of trade discounts as discriminatory pricing tools is developed. The results indicate that trade-ins and introductory discounts can be used in third-degree price discrimination, through the monopolist's choice of first-period price that results in a market segmented by possesion of the good.
Publication Name: RAND Journal of Economics
Subject: Economics
ISSN: 0741-6261
Year: 1995
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Output, price, and welfare under nonlinear pricing in an imperfectly competitive industry
Article Abstract:
A study is conducted on nonlinear pricing effects on consumer participation, total output, prices and aggregate welfare in a monopolistic or Cournot oligopolistic economy based on a simple commodity model of Ireland. Nonlinear pricing was found to be beneficial and should not be disregarded outright. The study demonstrates that nonlinear pricing can expand the market and improve welfare. The effects of nonlinear pricing on output, prices and welfare are tested by developing a criteria.
Publication Name: Journal of Economics and Business
Subject: Economics
ISSN: 0148-6195
Year: 1995
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A rationale for trade-ins
Article Abstract:
An analysis of trade-ins is presented. The analysis focuses on itsmarket application by monopolists in price discriminating consumers into two groups. it is shown that the technique is used by monopolists to exploit marketsegmentation. Initially, sellers set rates at which consumers are grouped into new and old buyers. Trade-ins are then applied to price discriminate among the buyers.
Publication Name: Journal of Economics and Business
Subject: Economics
ISSN: 0148-6195
Year: 1993
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