Manufacturers frequently post non-binding public price recommendations, but neither the rationale for this practice nor its impact on prices is well understood. I develop a model in which recommendations signal a manufacturer's production cost to searching consumers, who then form beliefs about...

Accountants are often asked for advice on pricing products, and their input is often quite helpful and necessary. Accountants, however, are very likely to focus on costs when trying to advise management on appropriate pricing strategies. Economists might focus on rules for maximizing short-run...

A small change in prices can have a significant impact on profits and it is therefore becoming crucial for firms to use innovative approaches to pricing. Smart pricing is a dynamic approach to pricing that requires that firms have accurate information about market demand and profit margins on...

Firms arguably price at 99-ending prices because of left-digit bias, the tendency of consumersto perceive a $4.99 as much lower than $5.00. Using retail scanner data on thousands of productsand dozens of retailers, I provide reduced-form support for this explanation. I then structurallyestimate...

This article demonstrates how various concepts derived from marketing and behavioral economics can be useful to accountants and others whose advice is sought on the setting of prices. In particular, it shows that a one-price policy may not always be ideal. Using price as a strategic tool can...

Online shops could offer each website customer a different price. Such personalised pricing can lead to advanced forms of price discrimination based on individual characteristics of consumers, which may be provided, obtained, or assumed. An online shop can recognise customers, for instance...

We quantify the welfare effects of zone pricing, or setting common prices across distinct markets, in retail oligopoly. Although monopolists can only increase profits by price discriminating, this need not be true when firms face competition. With novel data covering the retail home improvement...

Advertisers seek to maximize profits by investing in advertising. We propose a “cost-per-incremental-action” (CPIA) pricing model which incorporates the causal contribution of advertising in order to achieve the advertisers' objectives such as profit maximization. CPIA pricing aligns...

In this paper, we determine how premium payment methods impact effective prices (prices that include any consumer payment rewards). This question is fundamentally related to policy, and we provide a robust answer by considering how a variety of retail market structures are impacted by multiple...

Since the early 1970s, movie theaters in the United States have employed a pricing model of uniform prices for differentiated goods. At any given theater, one price is charged for all movies, seven days a week, 365 days a year. This pricing model is puzzling in light of the potential...