File Download
  Links for fulltext
     (May Require Subscription)
Supplementary

Article: Periodic price reduction as a way to boost diminishing demand

TitlePeriodic price reduction as a way to boost diminishing demand
Authors
KeywordsPrice discounts
Intertemporal pricing
Dynamic oligopoly
Dynamic programming
Shifting demand
Issue Date2012
PublisherOmics Publishing Group. The Journal's web site is located at http://www.omicsgroup.org/journals/bsfahome.php
Citation
Journal of Business and Financial Affairs, 2012, v. 1 n. 2, article no.102 How to Cite?
AbstractIn this paper, I offer a new theory for why price reductions take place on a regular basis in some industries. I suggest that the demand for a firm’s product drops over time because of the erosion of consumers’ brand recall, and that price discounts are utilized to boost the diminishing demand. A dynamic model is then constructed to demonstrate the theory for both monopoly and duopoly competition. I show that it is optimal for a monopolist to alternate between a constant high (normal) price and a constant low (discount) price with fixed frequency, and that competing firms offer discounts at the same time in duopoly competition.
Persistent Identifierhttp://hdl.handle.net/10722/164746
ISSN

 

DC FieldValueLanguage
dc.contributor.authorZhou, Wen_US
dc.date.accessioned2012-09-20T08:09:03Z-
dc.date.available2012-09-20T08:09:03Z-
dc.date.issued2012en_US
dc.identifier.citationJournal of Business and Financial Affairs, 2012, v. 1 n. 2, article no.102en_US
dc.identifier.issn2167-0234-
dc.identifier.urihttp://hdl.handle.net/10722/164746-
dc.description.abstractIn this paper, I offer a new theory for why price reductions take place on a regular basis in some industries. I suggest that the demand for a firm’s product drops over time because of the erosion of consumers’ brand recall, and that price discounts are utilized to boost the diminishing demand. A dynamic model is then constructed to demonstrate the theory for both monopoly and duopoly competition. I show that it is optimal for a monopolist to alternate between a constant high (normal) price and a constant low (discount) price with fixed frequency, and that competing firms offer discounts at the same time in duopoly competition.-
dc.languageengen_US
dc.publisherOmics Publishing Group. The Journal's web site is located at http://www.omicsgroup.org/journals/bsfahome.php-
dc.relation.ispartofJournal of Business and Financial Affairsen_US
dc.rightsCreative Commons: Attribution 3.0 Hong Kong License-
dc.subjectPrice discounts-
dc.subjectIntertemporal pricing-
dc.subjectDynamic oligopoly-
dc.subjectDynamic programming-
dc.subjectShifting demand-
dc.titlePeriodic price reduction as a way to boost diminishing demanden_US
dc.typeArticleen_US
dc.identifier.emailZhou, W: wzhou@business.hku.hken_US
dc.identifier.authorityZhou, W=rp01128en_US
dc.description.naturepublished_or_final_version-
dc.identifier.doi10.4172/2167-0234.1000102-
dc.identifier.hkuros207871en_US
dc.identifier.volume1en_US
dc.identifier.issue2, article no.102-
dc.publisher.placeUnited States-

Export via OAI-PMH Interface in XML Formats


OR


Export to Other Non-XML Formats