Abstract
Using multi-unit auctions, we examined the effect of different distributions of price discount across multiple units of a relatively new product on consumers' Willingness to Pay (WTP), sales value and retailers' revenue. We found that allowing the price discount to be increasing in the number of units increases willingness to pay, sales value and retailers' revenue and that a price discount that is uniformly distributed across units also has the potential to motivate consumers to buy more units of the product. However, multi-unit price promotions that concentrate all the amount of price discount on the last unit only generate a weak positive effect on sales value.
| Original language | English |
|---|---|
| Pages (from-to) | 14-32 |
| Number of pages | 19 |
| Journal | Agribusiness |
| Volume | 31 |
| Issue number | 1 |
| DOIs | |
| Publication status | Published - 2015 Jan 1 |
| Externally published | Yes |
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ASJC Scopus subject areas
- Agronomy and Crop Science
- Economics and Econometrics
- Food Science
- Animal Science and Zoology
- Geography, Planning and Development
Cite this
Effect of price-discount distribution in multi-unit price promotions on consumers' willingness to pay, sales value, and retailers' revenue. / Akaichi, Faical; Nayga, Jr, Rodolfo M.; Gil, José M.
In: Agribusiness, Vol. 31, No. 1, 01.01.2015, p. 14-32.Research output: Contribution to journal › Article
}
TY - JOUR
T1 - Effect of price-discount distribution in multi-unit price promotions on consumers' willingness to pay, sales value, and retailers' revenue
AU - Akaichi, Faical
AU - Nayga, Jr, Rodolfo M.
AU - Gil, José M.
PY - 2015/1/1
Y1 - 2015/1/1
N2 - Using multi-unit auctions, we examined the effect of different distributions of price discount across multiple units of a relatively new product on consumers' Willingness to Pay (WTP), sales value and retailers' revenue. We found that allowing the price discount to be increasing in the number of units increases willingness to pay, sales value and retailers' revenue and that a price discount that is uniformly distributed across units also has the potential to motivate consumers to buy more units of the product. However, multi-unit price promotions that concentrate all the amount of price discount on the last unit only generate a weak positive effect on sales value.
AB - Using multi-unit auctions, we examined the effect of different distributions of price discount across multiple units of a relatively new product on consumers' Willingness to Pay (WTP), sales value and retailers' revenue. We found that allowing the price discount to be increasing in the number of units increases willingness to pay, sales value and retailers' revenue and that a price discount that is uniformly distributed across units also has the potential to motivate consumers to buy more units of the product. However, multi-unit price promotions that concentrate all the amount of price discount on the last unit only generate a weak positive effect on sales value.
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UR - http://www.scopus.com/inward/citedby.url?scp=84921553090&partnerID=8YFLogxK
U2 - 10.1002/agr.21389
DO - 10.1002/agr.21389
M3 - Article
VL - 31
SP - 14
EP - 32
JO - Agribusiness
JF - Agribusiness
SN - 0742-4477
IS - 1
ER -