Sheng-Yeh, Wu, Guan-Ru, Chen and Ilia, Tetin

Correspondence: Guan-Ru, Chen, dionysiac@isu.edu.tw

International Finance Department, I-Shou University, Taiwan.

pdf (275.57 Kb) | doi: https://doi.org/10.47260/bae/9210

Abstract

This study provides a theoretic framework for price promotions on seasonal events and popular events, such as anniversary, Christmas, and World Soccer Cup. Firms engage in collective price promotions seems to contradict economic wisdom because promotions are less likely to stand out among competitors in popular events. In a rational expectations model, this study shows all players’ performance improve in the equilibrium. Furthermore, even less-famous goods benefit from collective price promotions in which the theoretic framework can provide a guideline to manufacturers and retailers.

Keywords:

  Event Promotions, Price-Quality Relationship, Advertising.

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