Note—An Economic Rationale for Door Prizes
Marketing Science · 1989 · Volume 8 · Issue 4
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.
Keywords
economics, pricing, door prizes, transaction cost
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