Competitive Dealing Strategy and Deal Value Escalation
扩展了Kinberg等人1974年的价格促销模型，证明在多个竞争者同时促销时，基于单一“最优”促销价值的反应策略会导致负利润且无法形成稳定均衡。
This note is an extension of “A Mathematical Model for Price Promotions” (Kinberg, Rao and Shakun [Kinberg, Yoram, Ambar G. Rao, Melvin F. Shakun. 1974. A mathematical model for price promotions. Management Sci. 20 948–959.]). That paper derived the revenue maximizing deal value for a firm in a monopolistically competitive, price (quality) partitioned market having two premium brands and consumers whose responses to deals are heterogeneous. This “optimal” deal value was derived under the assumed condition of no competitive dealing. When competitive dealing was considered, both dealing brands were assumed to offer the same “optimal” deal value. By extending the work of KRS to include a number of competitors sufficiently large that at least one is dealing in each period, this paper shows that a reactive dealing strategy based on a single “optimal” deal value produces negative profits and will not produce a stable equilibrium.