A Theory of Clearance Sales
Bibliographic Data
| ID | 9718985 |
|---|---|
| Authors | Volker Nocke (0000-0002-5000-6828, University of Pennsylvania and University of Oxford), Martin Peitz (0000-0001-5599-1399, International University in Germany and University of Mannheim) |
| Year | 2007 |
| Volume | 117 |
| Issue | 522 |
| Pages | 964-990 |
| Publication date | 2007-07-01 |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | The Economic Journal (JOURNAL) |
| Journal identifiers | ISSN: 0013-0133 • E-ISSN: 1468-0297 |
| Publisher | Oxford University Press (OUP) (PUBLISHER) |
| DOI | 10.1111/j.1468-0297.2007.02074.x |
| OpenAlex | W2099947105 |
| Language | EN |
| Citations received | 2 |
| References cited | 21 |
Clearance sales are widely used by firms as an intertemporal selling policy, in particular in markets where firms face demand uncertainty and need to choose capacity in advance. Clearance sales consist in charging a high price initially but then lowering the price in the sales period. High-valuation consumers purchase the good at the high initial price so as to avoid rationing at the low price, while low-valuation consumers wait for the price to drop. We develop a simple model of intertemporal monopoly pricing under demand uncertainty, and show that clearance sales may be the optimal intertemporal selling policy. Copyright 2007 The Author(s). Journal compilation Royal Economic Society 2007
Economics · Microeconomics · Monopoly · Rationing · Valuation (finance · Consumer Market Behavior and Pricing · Digital Platforms and Economics · Finance · Merger and Competition Analysis
| Citations per year | 0.13 |
|---|---|
| Citation span | 2010 - 2025 (16) |
| Highly cited | No |