TY  - JOUR
AU  - Ellison,Glenn
TI  - A Model of Add-on Pricing
JF  - National Bureau of Economic Research Working Paper Series
VL  - No. 9721
PY  - 2003
Y2  - May 2003
UR  - http://www.nber.org/papers/w9721
L1  - http://www.nber.org/papers/w9721.pdf
N1  - Author contact info:
Glenn Ellison
Department of Economics
Massachusetts Institute of Technology
50 Memorial Drive, E52-380A
Cambridge, MA 02142-1347
Tel: 617/253-8702
Fax: 617/253-1330
E-Mail: gellison@mit.edu
AB  - This paper examines a competitive model of add-on pricing, the practice of advertising low prices for one good in hopes of selling additional products (or a higher quality product) to consumers at a high price at the point of sale. The main conclusion is that add-on pricing softens price competition between firms and results in higher equilibrium profits.
ER  -