Department of Economics and Business - Universitat Pompeu Fabra

Title:: Bargaining at Retail Stores: Evidence from Vienna
Authors:: Sandro Shelegia and Joshua Sherman
Date:: January 2018
Abstract:: The optimality of trading mechanisms has long been a subject of interest in economics, yet there exists little empirical evidence regarding which mechanisms of trade are deployed in practice. Our audit study of retail stores in Vienna documents previously unknown and important facts. Stores agree to a discount off of the posted price approximately 40% of the time. Discounts are more likely to be granted by small-scale firms, for higher-priced products, and for non-sale items. Our findings are consistent with the predictions of a principle-agent model in which a firm decides whether to augment posted prices with bargaining concessions.
Keywords:: Bargaining; posted price, trading mechanism, audit study.
JEL codes:: L81, D12, C78, C93.
Area of Research:: Business Economics and Industrial Organization

Download the paper in PDF format (1,920 Kb)

Search Working Papers

By Author:
-enter one surname only or surname and first name separated by a comma and in this order-

By Date:
-when used a value in each of the four fields must be selected-
from (month) from (year) to (month) to (year)

By Keywords:
-separate each keyword or group of keywords by commas-

By JEL code(s):
-separate each code by commas-

By Area:

Predefined Queries