Abstract: It is easy to observe that consumers tend to be variety-seeking in a lot of markets, such as catering industry, tourist industry and fashion industry. In these industries, if an agent consumes the same product or service twice, he may be faced with utility loss. This kind of utility loss is called "staying cost". In addition, it can be also observed that many firms often use coupon pricing strategy. Coupon pricing strategy means that firms give its consumers a discount coupon, they will get discount price when they come to purchase next time. In this paper, this marketing strategy made by firms with consumers' variety-seeking as well as the effect of this behavior on the social welfare is mainly analyzed.
A two period duopoly model is developed based on Hotelling framework. The case is considered that duopoly firms can offer coupons to its consumers in the first period and they will get a discount price if they come to purchase in the second period. But at the same time loyal consumers will suffer from a utility loss. And if they choose the other firm in the second period, they have to pay the original price.
In the first part of this paper, a two stage model is developed to solve the sub-game perfect Nash equilibrium. The equilibrium shows that:(1) under the coupon pricing scheme, firms can offer discount coupon to its consumers for second purchasing, and charge original price to new consumers. (2) The behavior of consumers' variety-seeking will weaken competition between firms in the first period.
In the first part of this paper, welfare analysis is made for the equilibrium outcome. The comparative static analysis is made for consumer surplus, firms' profits and social welfare. And it is found that consumer surplus and social welfare will rise with increase of staying cost. But firm's profit will fall at the same time. Compared with other pricing schemes, such as uniform pricing, discrimination pricing and pre-commitment pricing, consumer surplus under coupon pricing is greater than other pricing schemes.
In general, our model can make a good explanation for many economic facts and firms' strategic behaviors, and further make some significant suggestions for the firms' marketing strategy.

Key words: variety-seeking, coupon pricing, differential pricing