Bargaining at Retail Stores: Evidence from Vienna

Sandro Shelegia and Joshua Sherman

No 14078, CEPR Discussion Papers from C.E.P.R. Discussion Papers

Abstract: In the West, where posted prices are the norm, it is uncommon to observe consumers receive discounts below the posted price. Nevertheless, we find that when stores are asked, a discount is granted approximately 40% of the time, with a median discount percentage of 10%. Discounts are more likely to be offered by small-scale firms, for higher-priced products, and for non-sale items. More generally, differences in price delegation behavior across firm types serve as an indicator that monitoring costs and employee skills are important drivers of bargaining behavior.

Keywords: Bargaining; Posted price; Trading mechanism; Audit study (search for similar items in EconPapers)
JEL-codes: C78 C93 D12 L81 (search for similar items in EconPapers)
Date: 2019-10
New Economics Papers: this item is included in nep-acc and nep-ore
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3)

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Related works:
Working Paper: Bargaining at Retail Stores: Evidence from Vienna (2018)
Working Paper: Bargaining at Retail Stores: Evidence from Vienna (2018)
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