An economic rationale for door prizes

An economic rationale for door prizes

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Article ID: iaor1990463
Country: United States
Volume: 8
Issue: 4
Start Page Number: 1
End Page Number: 7
Publication Date: Sep 1989
Journal: Marketing Science
Authors:
Abstract:

If buyers face transaction costs, a workable pricing scheme might require door prizes in addition to a per-unit price. The door prize compensates customers for the transaction expense, and the seller earns positive profit because the price exceeds the cost of inframarginal units.

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