Please use this identifier to cite or link to this item: https://hdl.handle.net/10419/238249 
Year of Publication: 
2020
Series/Report no.: 
Working Papers in Economics and Statistics No. 2020-25
Publisher: 
University of Innsbruck, Research Platform Empirical and Experimental Economics (eeecon), Innsbruck
Abstract: 
How should firms optimally choose prices and promotional strategies and how should they position their products when consumers are "relative thinkers"? We provide answers in a model that extends the seminal contributions of Varian (1980) and Narasimhan (1988) and derive both managerial implications and implications for empirical researchers with regards to promotional frequency and depth as well as observed product heterogeneity in the market.
Subjects: 
Relative Thinking
Price Competition
Promotions
Product Choice
Product Heterogeneity
Managerial Implications
JEL: 
D21
D43
D91
L11
L13
Document Type: 
Working Paper

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