Buy Now and Match Later: The Impact of Posterior Price Matching on Profit with Strategic Consumers

摘要: With a posterior price matching policy, seller guarantees to reimburse the difference consumer who buys product before marks it down. Such policy has been widely adopted by retailers. We examine impact of on consumers' purchasing behavior, seller's pricing and inventory decisions their expected payoffs, assuming that cannot credibly commit path, but, can implement policy. find eliminates strategic waiting incentive thus allows increase in regular selling season. When fraction consumers is not too small valuation decline over time neither low nor high, improve profit substantially as well investment. In such situations, loss if they otherwise wait are both high. However, adopt this also bears refund cost. The either pay will claim or forgo salvage value any leftover inventory. be detrimental when there only few present, very performance insensitive proportion correctness belief market. From perspective consumers, generally reduces surplus, however, cases where surplus increased, typically variance potential high-end market volume As result, Pareto improvement payoffs possible. Finally, we ability fixed path valuable matching.