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Quality improvement through consumer sorting and disposal
- Abstract::
- Sorting allows consumers to capture the value of quality differences. As higher quality goods are removed, the value of the seller's remaining stock falls, lowering the price and profits. Bundling and other marketing mechanisms can discourage sorting and prevent the depreciation of the seller's stock. With comparative statics and simulations, the author shows that sellers can increase expected quality and profits by committing to discard a proportion of their resale stock after sorting occurs. In this manner, sorting acts similarly to agricultural grading.
- Author(s):
-
Ferrier, Peyton
- Subject(s):
-
sorting , product quality , profit maximization , consumers , consumer attitudes
- Description:
- Includes references
- Source:
- Agribusiness 2009, v. 25, no. 4
- Language:
- English
- Year:
- 2009
- Publisher:
- Wiley Subscription Services, Inc., A Wiley Company
- Collection:
-
Journal Articles, USDA Authors, Peer-Reviewed
- File:
-
Download [PDF]
- Rights:
- Works produced by employees of the U.S. Government as part of their official duties are not copyrighted within the U.S. The content of this document is not copyrighted.
