Overselling in a Competitive Environment: Boon or Bane?

@article{Lim2009OversellingIA,
  title={Overselling in a Competitive Environment: Boon or Bane?},
  author={Wei Shi Lim},
  journal={Marketing Science},
  year={2009},
  volume={28},
  pages={1129-1143}
}
In this paper, we study the practice of overselling in a competitive environment where late-arriving consumers value the good higher than early-arriving ones but the former's arrival is uncertain. We show that overselling is a dominant strategy for the firms. However, it can lead to a prisoners' dilemma situation in which all firms are worse off overselling. We further show that only when demand from the late consumers far exceeds the supply and there is a sufficiently high profit margin from… CONTINUE READING

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