• Economics
  • Published 1991

A Theory of Channel Price Promotions

@inproceedings{Gerstner1991ATO,
  title={A Theory of Channel Price Promotions},
  author={Eitan Gerstner and James D. Hess},
  year={1991}
}
Manufacturers can stimulate sales by a temporary wholesale price reduction for the retailer, a rebate directed toward consumers, or a combination of both. The trade-offs between these price promotions are analyzed, providing insights about their roles, profitability, and welfare properties. Retailers' rebates are also studied. While price discrimination is a common explanation for rebates to consumers, when a product is sold through a distribution channel, the manufacturer may also use rebates… CONTINUE READING

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