Potential Profitability and Decreased Consumer Welfare Through Manufacturers' Cents‐Off Coupons
作者:
JAMIE HOWELL,
期刊:
Journal of Consumer Affairs
(WILEY Available online 1991)
卷期:
Volume 25,
issue 1
页码: 164-184
ISSN:0022-0078
年代: 1991
DOI:10.1111/j.1745-6606.1991.tb00287.x
出版商: Blackwell Publishing Ltd
数据来源: WILEY
摘要:
This paper examines the potential increase in oligopolistic manufacturers' profits due to a policy of cents‐off couponing and the resulting changes in consumer welfare and resource allocation. This paper offers support to the hypothesis that the observed couponing policies of U.S. manufacturers are motivated by their desire to increase profits through third‐degree price discrimination—a practice that results in welfare losses to consumers. While some conclusions reached have been dealt with by other researchers, its approach differs in that it attempts to quantify the probable magnitudes of the welfare effects and profit potential of manufacturers' couponing policies within the framework of a third‐degree price discrimination model where firms are assumed to behave as Cournot oligo
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