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the demand for a brand's existing products even if the quality of these existing products is well understood by consumers …. The model provides an interpretation for the dependence of the success of brand extensions on the ``fit" between the … original product and the extension. The model can also explain why a ``high-end" brand that is expected to care only for its …
Persistent link: https://www.econbiz.de/10013149303
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This paper starts by discussing consumers' cognitive and emotional reaction to posted prices. Cognitively, some consumers do not appear to make effective use of price information to maximize their consumption-based utility. Emotionally, prices can induce regret and anger among consumers. The...
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While much evidence suggests tha price rigidity is due to a concern with the reaction of customers, price increases do not seem to be typically associated with drastic reduction in purchases. To explain this apparent inconsistency, this paper develops a model where consumers care about the...
Persistent link: https://www.econbiz.de/10013310540
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I suppose that consumers see a firm as fair if they cannot reject the hypothesis that the firm is somewhat benevolent towards them. Consumers that can reject this hypothesis become angry, which is costly to the firm. I show that firms that wish to avoid this anger will keep their prices rigid...
Persistent link: https://www.econbiz.de/10013230827