Sales-Discount Regulation: How Much Bazaar Do Consumers Want?

15 Pages Posted: 16 Jul 2007

See all articles by Evelyn Korn

Evelyn Korn

University of Marburg - School of Business & Economics

Date Written: July 15, 2007

Abstract

In July 2001 the 70-year-old German Rabattgesetz that prevented negotiations in retail business has been abolished. During the abolition process consumer - as well as retailer pressure groups claimed that significant damages for their clients were to be expected. Using game theoretic modelling this paper discusses which economic consequences could arise from the amendment. It shows that none of the above-mentioned fears were justified. In addition, it uses a revealed-preference argument based on these predictions and on data concerning the dissemination of customer cards to describe consumers' general attitudes towards bargaining.

Keywords: bargaining, loyalty rewards programs, attitudes, institutions

JEL Classification: D11, K29, M31

Suggested Citation

Korn, Evelyn, Sales-Discount Regulation: How Much Bazaar Do Consumers Want? (July 15, 2007). Available at SSRN: https://ssrn.com/abstract=1000844 or http://dx.doi.org/10.2139/ssrn.1000844

Evelyn Korn (Contact Author)

University of Marburg - School of Business & Economics ( email )

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D-35037 Marburg
Germany
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HOME PAGE: http://www.uni-marburg.de/fb02/mikro

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