The effects of a “no-haggle” channel on marketing strategies

Zeng, Xiaohua; Dasgupta, Srabana; Weinberg, Charles B.

doi:10.1016/j.ijresmar.2014.06.002

Cited by 15 publications

(8 citation statements)

References 26 publications

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“…Korn () and Zeng et al . () consider monopolists, and so are silent about the implications of discounts on competitive outcomes, which is the focus of this study . Desai and Purohit () and Zeng et al .…”

Section: Relation To the Literaturementioning

confidence: 99%

“…Desai and Purohit () and Zeng et al . () focus on the marketing decision of whether to permit bargaining or not. In Desai and Purohit (), when both firms permit bargaining, the list prices are irrelevant to the bargainers since they are never effective outside options; thus the strategic interaction between list prices and discount prices is severed.…”

Section: Relation To the Literaturementioning

confidence: 99%

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Competition in Posted Prices with Stochastic Discounts

Gill

Thanassoulis

2016

Econ J

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We study price competition between firms over public list or posted prices when a fraction of consumers can subsequently receive discounts with some probability. Such stochastic discounts are a feature of markets in which some consumers bargain explicitly and of markets in which sellers use the marketing practice of couponing. Even though bargainers receive reductions off the posted prices, the potential to discount dampens competitive pressure in the market, thus raising all prices and increasing profits. Welfare falls because of the stochastic nature of the discounts, which generates some misallocation of products to consumers. Stochastic discounts facilitate collusion by reducing the market share that can be gained from a deviation.

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Section: Relation To the Literaturementioning

confidence: 99%

Section: Relation To the Literaturementioning

confidence: 99%

Competition in Posted Prices with Stochastic Discounts

Gill

Thanassoulis

2016

Econ J

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“…Finally, I turn to research that compares profits earned under fixed pricing versus negotiations, which explains differences on the basis of isoperfect price discrimination, competition, product quality, relative bargaining power, and bargaining costs (e.g., Arnold and Lippman 1998;Bester 1993;Myatt and Rasmusen 2011;Wang 1995). Another consideration is hybrid pricing, such that sellers post a price but also negotiate with consumers (e.g., Chen and Rosenthal 1996;Cui, Mallucci, and Zhang 2019;Desai and Purohit 2004;Gill and Thanassoulis 2016;Riley and Zeckhauser 1983;Zeng, Dasgupta, and Weinberg 2014). According to contributions in this research stream, competition (Huang 2020;Zhang, Manchanda, and Chu 2021), the fixed costs of initiating a negotiation (Jindal and Newberry 2018), cognitive dissonance, and sunk cost fallacy (Desai and Jindal 2021) all influence the profitability of a hybrid pricing strategy.…”

Section: Literature Reviewmentioning

confidence: 99%

Perceived Versus Negotiated Discounts: The Role of Advertised Reference Prices in Price Negotiations

Jindal¹

2021

Journal of Marketing Research

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Retailers routinely present a posted price together with a higher advertised reference price, in an effort to evoke a perception of the discount the consumer is receiving. If prices can be negotiated though, what impact does this initial perceived discount (IPD) have on the ultimate discount, demand, and revenue? With data from consumers of a large durable goods retailer, in a natural decision-making environment, this study provides evidence that a greater IPD is associated with smaller negotiated discounts. Then, a lab experiment involving negotiation and purchase decisions for multiple products, with randomly assigned values of the IPD, establishes that a $1 increase in IPD lowers the negotiated discount by 4.7 cents. Furthermore, 75% of this decrease can be attributed to reduction in the participants' likelihood to initiate a negotiation. Under bargaining, almost half of the increase in revenue from a higher IPD stems from an increase in the negotiated price, which is unlike fixed pricing, in which setting an increase in IPD affects revenue only through changes in demand. Sellers also have a greater incentive to set exaggerated advertised reference prices in bargaining contexts, compared with fixed pricing. These findings in turn have implications for researchers, retailers, and consumers.

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“…A small and recent literature considers the consequences of discounts and bargaining when some consumers take list or posted prices as given. Korn (2007) and Zeng et al (2007) consider monopolists, and so are silent about the implications of discounts on competitive outcomes, which is the focus of this study. 1 Desai and Purohit (2004) and Zeng et al (2007) focus on the marketing decision of whether to permit bargaining or not.…”

Section: Relation To the Literaturementioning

confidence: 99%

“…Korn (2007) and Zeng et al (2007) consider monopolists, and so are silent about the implications of discounts on competitive outcomes, which is the focus of this study. 1 Desai and Purohit (2004) and Zeng et al (2007) focus on the marketing decision of whether to permit bargaining or not. In Desai and Purohit (2004), when both firms permit bargaining, the list prices are irrelevant to the bargainers since they are never effective outside options; thus the strategic interaction between list prices and discount prices is severed.…”

Section: Relation To the Literaturementioning

confidence: 99%

Competition in Posted Prices with Stochastic Discounts

Gill

Thanassoulis

2015

SSRN Journal

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The effects of a “no-haggle” channel on marketing strategies

Cited by 15 publications

References 26 publications

Competition in Posted Prices with Stochastic Discounts

Competition in Posted Prices with Stochastic Discounts

Perceived Versus Negotiated Discounts: The Role of Advertised Reference Prices in Price Negotiations

Competition in Posted Prices with Stochastic Discounts

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