The firms in this model set non-binding list prices before competing for buyers by non-cooperatively granting discounts. Each firm has an incentive to set a high list price if, for example, the customers anchor their willingness-to-pay on the list price. However, list price competition occurs if...

The firms in this model set non-binding list prices before competing for buyers by non-cooperatively granting discounts. Each firm has an incentive to set a high list price if, for example, the customers anchor their willingness-to-pay on the list price. However, list price competition occurs if...

In this paper we estimate and empirically test different behavioral theories of consumer reference price formation. Two major theories are proposed to model the reference price reaction: assimilation contrast theory and prospect theory. We assume that different consumer segments will use...

We evaluate reference price models with regard to their ability to explain brand choices of individual households. Reference price models are of the adaptive expectations and extrapolative expectations types. Brand choice is analyzed by means of multinomial logit (MNL) models....

In this paper we first show that the gains achievable by integrating pricing and inventory controlare usually small for classical demand functions. We then introduce reference price models anddemonstrate that for this class of demand functions the benefits of integration with inventory...

Fierce competition and rapid technological progress have considerablyreduced the life cycle length for mobile phones in the last decade. Once a newmobile phone is launched, providers on the market under consideration practice amarkdown strategy. Profits of the providers are generated mainly via...

Pay-What-You-Want (PWYW) is a participative pricing mechanism which is characterizedby the fact that consumers have maximum control over the price they pay. We discuss thebusiness relevance of PWYW and extend the findings of Kim et al. (2009) using latentclass regression. Two different classes...

We present an experiment designed to investigate the presence and nature of ordering effects within repeated response stated preference studies. We formulate a general structural model of such effects and use this to isolate signature patterns for position-dependent effects (learning about...