Modern revenue managers understand, anticipate, and react to market demand to maximize their businesses' revenues. They often do so by analyzing, forecasting, and optimizing their fixed, perishable inventory, and time-variable supply, through dynamic prices. Hence, the objective of pricing and...

In many service industries, firms introduce three-part tariffs to replace or complement existing two-part tariffs. As opposed to two-part tariffs, three-part tariffs offer allowances, or “free” units of the service. Behavioral research suggests that the attributes of a pricing plan may...

This paper analyzes dynamic advertising and pricing policies in a durable-good duopoly. The proposed infinite-horizon model, while general enough to capture dynamic price and advertising interactions in a competitive setting, also permits closed-form solutions. We use differential game theory to...

We investigate how mentioning the price paid to others (which we refer to as price-dropping) can be used to the negative experience that occurs when consumers realize they unintentionally overpaid for a product. Specifically, we show that by engaging in price-dropping, consumers re-appropriate...

A model of new-product adoption is proposed that incorporates price and advertising effects. An optimal control problem that uses the model as its dynamics is solved explicitly to obtain the optimal price and advertising effort over time. The model has a great potential to be used in obtaining...

Major retailers in the USA offer Money Back Guarantees (MBGs) under which they return money to dissatisfied customers. Some of these retailers also offer Low price Guarantees (LPGs) under which they promise to refund price differences if buyers find a lower price after purchase. Some researchers...

The purpose of this article is to find out the relationship between yellow price tags and consumer reference prices. A laboratory study was conducted among 150 respondents, who were put in an experimental purchase situation and their initial internal reference prices were compared affected...

We investigate the impact of store capacity and extent of inter-product substitution in a retailer's assortment on the optimal timing and depth of price promotions using a two step approach. First, a survey of price promotions within the shampoo and detergent assortments of four mass-market...

The world economy is changing, this is a fact. New technology, new communication possibilities have reduced the physical boundaries and have made customers more knowledgeable and with more requirements. Overcoming those challenges, companies (in specific SMEs) are striving to develop new...

Managers often set prices just-below a round number (e.g., $39)—a strategy that lowers price perceptions and increases sales. The authors question this conventional wisdom in a common consumer context: upgrade decisions (e.g., whether to upgrade a rental car or hotel room). Seven...