A Generalized Model of Advertised Sales

To better understand temporary price reductions or sales, this paper presents a generalized clearinghouse framework of advertised sales and explores some applications. By viewing the firms as competing in utility and amending the conventional tiebreak rule, we allow for multiple dimensions of firm heterogeneity in complex market environments. Moreover, we (i) provide original insights into the number and types of firms that use sales, (ii) offer new results on how firm heterogeneity affects market outcomes, (iii) extend a common empirical cleaning procedure, and (iv) analyze a family of activities in sales markets, including persuasive advertising and obfuscation.

Automated summary

This paper presents a generalized clearinghouse framework of advertised sales and explores how firm heterogeneity affects market outcomes. It provides original insights into the number and types of firms that use sales, offers new results on market outcomes, extends a common empirical cleaning procedure, and analyzes a family of activities in sales markets.