Marketing Science 1989

Note—An Economic Rationale for Door Prizes

Allan Richard Young

University of Hawaii at Hilo

Abstract

If buyers face transaction costs, a workable pricing scheme might require door prizes in addition to a per-unit price. The door prize compensates customers for the transaction expense, and the seller earns positive profit because the price exceeds the cost of inframarginal units.

DOI

10.1287/mksc.8.4.375

Sources

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APA 7 MLA 9 Chicago (author–date) Harvard Elsevier Harvard (JFE, JBF…) The Accounting Review Academy of Management American Marketing Association INFORMS (Management Science) Copy citation Copied ✓