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Revista Abante

calendar_month Publicación: 01/01/2007

Why Do Some Prices in the Retail Sector Drop When Demand Rises? Evidence from the Chilean Case

[:es]Internationally, the prices of retail products have been seen to drop during periods of exogenous increases in demand. The purpose of this paper is to study the generality of this stylized fact by investigating whether this behavior also takes place in Chile, through the monthly prices of a set of retail products with positive demand seasonality. The prices of some products show a drop during their peak idiosyncratic demand. Moreover, tha results are consistent with the loss leaders modeL, according to which prices are proactively reduced by retailers in order to attract buyers to stores.[:]

Fuente: Revista Abante

Volumen 10, Número 2, Páginas 151-168

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