The optimal face value of a discount coupon

Article Abstract:

Firms issue special discount coupons as forms of marketing strategies and efforts of increasing their sales. A study analyzed the viability of these coupons as a means of attracting new customers, maintaining customer loyalty and subsequently causing a voluntary price discrimination. The main factors influencing the value of coupons were initial profit margin, extent of the deal-prone and loyal market segments and the coupon's processing cost. It was indicated that a firm is likely to issue a coupon when the profit margin is high and a large customer base of the deal-prone segment exists.

Pricing Policy, Analysis, Management, Pricing, Sales promotions, Coupons (Retail), Discount coupons, Discounts (Sales)

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Macroeconomic forecasts under the prism of error-correction models

Article Abstract:

Empirical evidence shows that predictable errors are common in macroeconomic forecasts. An analysis of the 'DRI/McGraw Hill Macro Model for the U.S. Economy' confirms the pervasiveness of predictable errors in the forecasts of large-scale econometric models and provides an explanation for the pattern. The pattern of predictable errors identified in the document indicates that changes in the error correction term may reveal relevant information about short-run dynamics which could help reduce predictable errors in macroeconomic forecasts.

Econometrics & Model Building, Forecasting, Models, Forecasts and trends, Econometrics, Economic forecasting, Macroeconomics, Business forecasting, Business models

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