Presentation Title

Top-Shelf Price for Bottom-Shelf Goods: Transaction Related Price Factors

Advisor Information

Catherine Co

Location

Milo Bail Student Center Dodge Room B

Presentation Type

Oral Presentation

Start Date

8-3-2013 1:30 PM

End Date

8-3-2013 1:45 PM

Abstract

This article specifies and estimates the influence of purchase related transaction costs on the spread in price between new and used durable goods. Its primary contributions are to provide a framework for studying consumer choice in the presence of both new and used markets for durables, and decomposing transaction costs into separate measurable elements. The model also considers the element of newness in the purchase decision. Specifically, I estimate the contribution on price spread of six transaction elements, and a measure of newness, in the market for used store fixtures. Results show that vendors who provide services to reduce transaction costs can command a premium in the marketplace and narrow the spread in price between new and used. The results also show that refurbishing a product, bringing back that new car smell, can increase relative price.

This document is currently not available here.

COinS
 
Mar 8th, 1:30 PM Mar 8th, 1:45 PM

Top-Shelf Price for Bottom-Shelf Goods: Transaction Related Price Factors

Milo Bail Student Center Dodge Room B

This article specifies and estimates the influence of purchase related transaction costs on the spread in price between new and used durable goods. Its primary contributions are to provide a framework for studying consumer choice in the presence of both new and used markets for durables, and decomposing transaction costs into separate measurable elements. The model also considers the element of newness in the purchase decision. Specifically, I estimate the contribution on price spread of six transaction elements, and a measure of newness, in the market for used store fixtures. Results show that vendors who provide services to reduce transaction costs can command a premium in the marketplace and narrow the spread in price between new and used. The results also show that refurbishing a product, bringing back that new car smell, can increase relative price.