A Nested Logit Model of Strategic Promotion Selected

@inproceedings{Richards2005ANL,
  title={A Nested Logit Model of Strategic Promotion Selected},
  author={Timothy J. Richards},
  year={2005}
}
Retailers use sales – price promotions – for a number of potential reasons. There is relatively little research, however, on their strategic role among frequently consumed perishable products. Using a two-stage, nested logit model of retail equilibrium, we show that promotion will be most effective (ie. increase store-level sales) if products are highly differentiated, but stores are relatively similar. To test this hypothesis, we an oligopolistic model of promotion rivalry with category-level… CONTINUE READING

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