Dynamic effects of price promotions: field evidence, consumer search, and supply-side implications

Goat Dairy Product Assortment in Different Sales Channels in Northwestern Italy

“…Large-scale retailing is at an intermediate level in terms of the price of the offer, thanks to the advantageous organizational features that characterize it [20,38]. This last result is also confirmed for cow’s milk cheeses, for which the best quality/price ratio is in large-scale distribution, where, moreover, the offer is often enhanced by the promotion of prices [32,34,35]. Price competitiveness in farmers’ markets remains high, also for other products (cow’s or sheep cheese), in accordance with price policies that do not see intermediaries intervening in the price increase, unless it is the sale of niche products or provision of special production systems [55,57].…”

“…The checklist used in the data collection phase (Table 1) also included descriptive product data, i.e., in addition to the type of product (milk, yoghurt, butter, or cheese), the producer name [23,29], the origin [28,30,31], the price [27,32,33] and the presence of offers [34,35] were recorded. In the case of milk, all types of milks (pasteurized, long-life, raw, skimmed, partially skimmed, and whole) were registered during data collection into the unique category of milk products (due to the limited offers), whereas, in the case of cheese, the distinction between spreader, fresh/ripened, soft/semi-hard/hard, blue, stretched, and grated products was registered.…”

Estimation of Sequential Search Models

“…In this dissertation, we present a method to estimate the sequential search model with preference shocks assumed to follow the normal distribution as in Kim et al (2010). However, a recent work by Elberg et al (2019) shows another closed-form conversion between the reservation utility and the search cost under the logistic distribution assumption on the preference shock. As their conversion also allows the reservation utility to be the sum of expected utility and some function of search cost, the proposed method in this…”

“…So the decision to make a rst click depends on the realized utility of the outside option and the reservation utilities of the inside products. For example, if a consumer leaves the website without making any click, it suggests that the reservation utilities are all lower than the outside option's realized dissertation can easily accommodate the specication in Elberg et al (2019) with small modications and without increasing the computational burden.…”

“…2. Another implementation of the KSFS is in Elberg et al (2019). An interesting feature of that study is that the authors derive a closed-form expression for the reservation utility (described later in this dissertation) under the assumption of a logistic distribution for the unobserved terms in the utility functions of consumers.…”