Rebates, inventories, and intertemporal price discrimination

We demonstrate that universally redeemed rebates can increase manufacturer profits by reducing the incentives of downstream retailers to hoard inventories when optimal wholesale prices vary predictably over time. By bypassing retailers and making direct contracts with buyers, the manufacturer can increase the variations in effective prices paid by consumers without concomitantly creating larger incentives for retailers to hold inventories. During profitable, high-demand periods, manufacturer revenues are ordinarily constrained by'competition'from retailer inventories, thus limiting profits. However, by selectively offering rebates to consumers while maintaining high wholesale prices, low-demand periods can be accommodated without inducing retailer hoarding.     

Reliant behavior in the United States and Japan

Japanese economic success is often attributed to culturally reinforced psychological conditioning that promotes interpersonal reliance, cooperation, and a group interest orientation. This article provides direct experimental evidence on differences in behavior among future business people in the United States and Japan. Utilizing a simple, two person extensive form game of perfect information introduced by Selten (1975), we provide evidence that, contrary to some views, the Japanese can be less reliant on the behavior of others and are more likely to take actions at variance with group welfare in some settings. Thus, popular explanations of Japanese economic achievements may require further exploration.