“Last-chance” sales: what makes them credible?
This paper analyzes the firms’ standard practice of announcing clearance or “last-chance” sales, namely advertising that a particular product is not going to be available in the market anymore. In the context of a two-period signaling game, prices and advertising decisions of firms are analyzed. The...
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| Formato: | Artículo |
| Lenguaje: | español |
| Publicado: |
Universidad Autónoma de Nuevo León
2009
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| Acceso en línea: | https://ensayos.uanl.mx/index.php/ensayos/article/view/96 |
| _version_ | 1824325148102098944 |
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| author | Muñoz García, Félix González Lozano, Heriberto |
| author_facet | Muñoz García, Félix González Lozano, Heriberto |
| author_sort | Muñoz García, Félix |
| collection | Artículos de Revistas UANL |
| description | This paper analyzes the firms’ standard practice of announcing clearance or “last-chance” sales, namely advertising that a particular product is not going to be available in the market anymore. In the context of a two-period signaling game, prices and advertising decisions of firms are analyzed. Then, the set of separating and pooling equilibria is characterized, so that the above usual advertising techniques can be better understood as equilibria of this model for certain parameter values. In particular, this paper shows that, when the firm which continues in the business knows that few of their current customers will come back in future periods, the set of separating equilibria shrinks. That is, fewer future prospects induce all types of firms to compete for current consumers, leading to pooling equilibria in which all firms announce a “last-chance” sale, even if some of them know they will remain in the industry next period. Clasificación JEL: L12, D82. |
| first_indexed | 2025-02-05T19:56:00Z |
| format | Article |
| id | ensayos-article-96 |
| institution | UANL |
| language | spa |
| last_indexed | 2025-02-05T19:56:00Z |
| physical | Ensayos Revista de Economía; Vol. 28 No. 1 (2009): MAY 2009; 61-80 Ensayos Revista de Economía; Vol. 28 Núm. 1 (2009): MAYO 2009; 61-80 2448-8402 1870-221X |
| publishDate | 2009 |
| publisher | Universidad Autónoma de Nuevo León |
| record_format | ojs |
| spelling | ensayos-article-962023-12-11T11:06:53Z “Last-chance” sales: what makes them credible? Muñoz García, Félix González Lozano, Heriberto signaling advertising separating equilibria information transmission. This paper analyzes the firms’ standard practice of announcing clearance or “last-chance” sales, namely advertising that a particular product is not going to be available in the market anymore. In the context of a two-period signaling game, prices and advertising decisions of firms are analyzed. Then, the set of separating and pooling equilibria is characterized, so that the above usual advertising techniques can be better understood as equilibria of this model for certain parameter values. In particular, this paper shows that, when the firm which continues in the business knows that few of their current customers will come back in future periods, the set of separating equilibria shrinks. That is, fewer future prospects induce all types of firms to compete for current consumers, leading to pooling equilibria in which all firms announce a “last-chance” sale, even if some of them know they will remain in the industry next period. Clasificación JEL: L12, D82. Universidad Autónoma de Nuevo León 2009-05-01 info:eu-repo/semantics/article info:eu-repo/semantics/publishedVersion Peer-reviewed Article Artículo arbitrado por pares application/pdf https://ensayos.uanl.mx/index.php/ensayos/article/view/96 10.29105/ensayos28.1-4 Ensayos Revista de Economía; Vol. 28 No. 1 (2009): MAY 2009; 61-80 Ensayos Revista de Economía; Vol. 28 Núm. 1 (2009): MAYO 2009; 61-80 2448-8402 1870-221X spa https://ensayos.uanl.mx/index.php/ensayos/article/view/96/81 Derechos de autor 2009 Félix Muñoz García, Heriberto González Lozano https://creativecommons.org/licenses/by/4.0 |
| spellingShingle | signaling advertising separating equilibria information transmission. Muñoz García, Félix González Lozano, Heriberto “Last-chance” sales: what makes them credible? |
| thumbnail | https://rediab.uanl.mx/themes/sandal5/images/article.gif |
| title | “Last-chance” sales: what makes them credible? |
| title_full | “Last-chance” sales: what makes them credible? |
| title_fullStr | “Last-chance” sales: what makes them credible? |
| title_full_unstemmed | “Last-chance” sales: what makes them credible? |
| title_short | “Last-chance” sales: what makes them credible? |
| title_sort | last chance sales what makes them credible |
| topic | signaling advertising separating equilibria information transmission. |
| topic_facet | signaling advertising separating equilibria information transmission. |
| url | https://ensayos.uanl.mx/index.php/ensayos/article/view/96 |
| work_keys_str_mv | AT munozgarciafelix lastchancesaleswhatmakesthemcredible AT gonzalezlozanoheriberto lastchancesaleswhatmakesthemcredible |