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| Topic: |
Business
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| Number of pages / Number of words: |
9 / 2282 |
Essay's paper body
(the interpretation of Padilla’s work as a potential model of price promotions was first suggested by Villas-Boas and Berto Villas-Boas). In addition, our model doesn’t require overlapping generations, i.e., the consumers acting in the market are always aware of the relevant history. Putting aside that requirement isolates the causes of price promotions from this generational ‘resetting’ mechanism...
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Putting aside that requirement isolates the causes of price promotions from this generational ‘resetting’ mechanism. We also introduce uncertainty about consumer preferences on the firm side. This uncertainty comes from a random utility model, i.e., consumers experience shocks that can slightly affect their preferences in each period...
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