Asymmetric Wholesale Pricing: Theory and Evidence
- Topics:
- Price Optimization,
- Wholesale
- Tags:
- Marketing,
- Marketing Research,
- Pricing,
- Pricing Strategy,
- Retail Price,
- Theory,
- University Of Miami,
- Wholesale Price
- Source:
- University of Miami
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Overview: Asymmetric pricing is the phenomenon where prices rise more readily than they fall. This report articulates, and provides empirical support for, a theory of asymmetric pricing in wholesale prices. In particular, it shows how wholesale prices may be asymmetric in the small but symmetric in the large, when retailers face costs of price adjustments. The implication is asymmetric - small wholesale increases are more profitable because manufacturers will not lose customers from higher retail prices; yet, small wholesale decreases are less profitable, because these will not create lower retail prices, hence no extra revenue from greater sales.
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Format: PDF | Size: 1,341KB | Date: Jan 2005 | Pages: 103
