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Anderson, Simon P.; Renault, Régis

doi:10.2139/ssrn.521742

Cited by 58 publications

(152 citation statements)

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“…Using steps on page 111 of Anderson and Renault (2006), p [1 − F (p + y)] is also maximized at a price below p m . It then follows that p [1 − F (p + y)] is decreasing in p for all p > p m .…”

Section: Resultsmentioning

confidence: 99%

“…However in a related paper Ambrus and Weinstein prove that loss-leading is only possible when there are very delicate demand complementarities between products. 3 Our model on the other hand can generate loss-leaders even when all products are symmetric and independent. Closer in spirit are Hess and Gerstner (1987) and Lal and Matutes (1994), both of which show that firms advertise lossleaders to attract consumers, before charging them very high prices on other unadvertised products.…”

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confidence: 90%

“…Secondly firms might send out adverts which commit them to charging a particular price, and thereby guarantee consumers some surplus (Wernerfelt 1994, Anderson andRenault 2006). Thirdly consumers might only learn their match for a product after searching for it.…”

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confidence: 99%

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Multiproduct Pricing and the Diamond Paradox

Rhodes

2011

SSRN Journal

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Section: Resultsmentioning

confidence: 99%

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confidence: 90%

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Multiproduct Pricing and the Diamond Paradox

Rhodes

2011

SSRN Journal

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“…They show that retailers compete for store traffic through low advertised prices, because once consumers arrive at a store they end up paying high prices on other products. 3 Our model suggests a different explanation for low advertised prices -namely a retailer's desire to build a low-price image. This low-price image persuades consumers that they will not be overcharged too much on the retailer's other products, and ultimately leads to higher store-wide profits.…”

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confidence: 88%

“…In both cases competition for the better-informed consumers leads to somewhat lower prices. Secondly firms might send out adverts which commit them to charging a particular price, and thereby guarantee consumers some surplus (Wernerfelt 1994, Anderson and Renault 2006). Thirdly consumers might only learn their match for a product after searching for it.…”

Section: Introductionmentioning

confidence: 99%

Multiproduct Retailing

Betancourt¹

2004

The Economics of Retailing and Distribution

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We study the pricing behavior of a multiproduct retailer, when consumers must pay a search cost to learn its prices. Equilibrium prices are high because rational consumers understand that visiting the store exposes them to a hold-up problem.However a firm with more products charges lower prices, because it attracts consumers who are more price-sensitive. We also show that when the retailer advertises the price of one product, it provides consumers with some indirect information about all of its other prices. The firm therefore exploits this and sets a relatively low advertised price, in order to build a store-wide 'low-price image'.

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Niche products, generic products, and consumer search

Larson

2011

Econ Theory

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We endogenize product design in a model of sequential search with random firm-consumer match value à la Wolinsky (1986) and Anderson and Renault (1999). We focus on a product design choice by which a firm can control the dispersion of consumer valuations for its product; we interpret low dispersion products as 'generic' and high dispersion products as 'nichy.' Equilibrium product design depends on a feedback loop: when reservation utility is high (low), the marginal customer's match improves (worsens) with more nichy products, encouraging high (low) differentiation by firms. In turn, when firms offer more nichy products, this induces more intense search; depending on search costs, this could raise or lower consumers' reservation utility. Remarkably, when the match distribution satisfies a hazard rate condition, firm and consumer interests align: equilibrium product design always adjusts to the level that maximizes utility. When this condition is not met, either multiple equilibria (one nichy, the other generic) or one asymmetric equilibrium (generic and nichy firms coexist) can arise; we argue that the former is more likely for common specifications of consumer preferences.

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Cited by 58 publications

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Multiproduct Pricing and the Diamond Paradox

Multiproduct Pricing and the Diamond Paradox

Multiproduct Retailing

Niche products, generic products, and consumer search

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