This study aims to explain why joint price promotions like anniversary sales and trade fairs are widely used in practices. Firms engaging in joint price promotions seem to behave irrationally because consumers might misinterpret price variations as a reduction in quality. Besides this, such promotions might lead to a prisoner’s dilemma, with competitors launching price promotions simultaneously. However, this study indicates that, although price promotions can leave adverse effects on brand equity, if firms use price promotions in the same period, consumers will realize that the price variations are due to comovement of price discounts rather than variance of quality. Under the appearance of fierce price competition, firms can actually increase collective profits by increasing the covariance of price promotions. This result contradicts the traditional wisdom that firms should offer price promotions in alternating periods if they intend to avoid a prisoner’s dilemma. In the Cournot–Nash or Bertrand–Nash equilibrium, the rational expectations model demonstrates the risk reduction role of joint price promotions. Moreover, this study shows that joint price promotions can lower price competition between advertised and unadvertised goods and those goods with more advertising coverage are more natural candidates for independent promotions.