Loss-leader pricing and upgrades
A new theory of loss-leader pricing is provided in which firms advertise low (below cost) prices for certain goods to signal that their other unadvertised (substitute) goods are not priced too high. The theory is applied to the pricing of upgrades. The results contrast with most existing loss-leader theories in that firms make a loss on some consumers (who buy the basic version of the good) and a profit on others (who buy the upgrade). (C) 2013 Elsevier B.V. All rights reserved.
- Publisher
- ELSEVIER SCIENCE SA
- Issue Date
- 2014-01
- Language
- English
- Article Type
- Article
- Keywords
STRATEGIES
- Citation
ECONOMICS LETTERS, v.122, pp.19 - 22
- ISSN
- 0165-1765
- Appears in Collection
- MT-Journal Papers(저널논문)
- Files in This Item
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