Open AccessNote—An Economic Rationale for Door Prizes
Author(s) -
Allan Richard Young
Publication year - 1989
Publication title -
marketing science
Language(s) - English
Resource type - Journals
SCImago Journal Rank - 5.938
H-Index - 127
eISSN - 1526-548X
pISSN - 0732-2399
DOI - 10.1287/mksc.8.4.375
Subject(s) - transaction cost , microeconomics , profit (economics) , database transaction , unit price , economics , face (sociological concept) , business , unit (ring theory) , industrial organization , scheme (mathematics) , commerce , computer science , database , mathematical analysis , social science , mathematics education , mathematics , sociology
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.economics, pricing, door prizes, transaction cost