THE TIMING AND MAGNITUDE OF RETAIL STORE MARKDOWNS - EVIDENCE FROM WEEKENDS AND HOLIDAYS

We examine daily prices of eight goods at seventeen retail stores coll ected in Ann Arbor, Michigan, over a four-month period from November 1 to February 28. We focus on weekly and seasonal price patterns, and o n the frequency of price markdowns or ''sales.'' There were frequent m arkdowns in the intensive shopping period prior to Christmas, and a te ndency for such sales to occur on weekends. We interpret these finding s as evidence that a significant number of markdowns are timed to occu r when shopping intensity is exogeneously high. We complement the impe rfect information-based motives for sales in the literature by contrib uting an additional element based on the role of bulk shopping and inc reasing returns in the shopping technology.