TY  - JOUR
AU  - Nevo,Aviv
AU  - Wolfram,Catherine
TI  - Prices and Coupons for Breakfast Cereals
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 6932
PY  - 1999
Y2  - February 1999
UR  - http://www.nber.org/papers/w6932
L1  - http://www.nber.org/papers/w6932.pdf
N1  - Author contact info:
Aviv Nevo
Department of Economics
Northwestern University
2001 Sheridan Road
Evanston, IL 60208-2600
Tel: 847/491-8212
Fax: 847/491-7001
E-Mail: nevo@northwestern.edu

Catherine Wolfram
Haas School of Business
University of California, Berkeley
Berkeley, CA  94720-1900
Tel: 510/642-2588
Fax: 510/643-1420
E-Mail: wolfram@haas.berkeley.edu
AB  - This paper explores the relationship between shelf prices and manufacturers' coupons for 25 ready-to-eat breakfast cereals. Contrary to the predictions of static monopoly price discrimination, we find the shelf prices for a particular brand in a particular city are generally lower during periods when coupons are available. We find evidence that is also inconsistent with dynamic theories of pricing that predict lower prices and coupons after periods of low demand, and find little support for explanations of couponing based on the vertical relationship between manufacturers and retailers.  We find some support for models of price discrimination in oligopoly settings that suggest inter-brand competition can cause all prices to be lower than the uniform (non-discriminatory) price.  We also find some evidence suggesting that firm-wide incentives may induce managers to use coupons and price cuts simultaneously in order, for example, to meet market share targets.
ER  -