Author: Matthew OsbornePublisher:
ISBN:
Category :
Languages : en
Pages : 44
Book Description
A Dynamic Model of Price Signaling, Consumer Learning, and Price Adjustment
Author: Matthew OsborneSearch with Learning and Price Adjustment Dynamics
Author: Arthur FishmanPublisher:
ISBN:
Category : Prices
Languages : en
Pages : 76
Book Description
Consumer Learning and a Firm’s Dynamic Pricing Strategy
Author: Yangyang WangPublisher:
ISBN:
Category : Economics
Languages : en
Pages : 204
Book Description
In the traditional discrete choice model, we assume that consumers know the product attributes without uncertainty. Learning models extend the discrete choice model by assuming that consumers have incomplete information about product attributes and that they can gradually resolve the uncertainty as they receive more information about the product over time. In the first chapter of this dissertation, I conduct a survey on literature of empirical learning models. I distinguish the learning models into three categories. First, demand side learning models which focuses on the effect of different types of consumer learning on demand. Second, supply side learning models which studies the firm's strategies when it does not have full information of consumer demand. Third, consumer learning and firm's marketing strategies which focuses on the interaction of consumer learning and firm's strategies. Empirical learning models have been proved to be a fruitful area of research activity and consumer learning dynamics have been intensively investigated, but there are two areas for future research --- empirical models that combines consumer learning and firm dynamics and empirical models that feature both consumer learning and firm learning.
Price Dynamics and Consumer Learning
Author: Ramón CaminalPublisher:
ISBN:
Category : Competencia - Modelos matemáticos
Languages : en
Pages : 24
Book Description
Review of Marketing Research
Author: Naresh K MalhotraPublisher: Routledge
ISBN: 1351551043
Category : Business & Economics
Languages : en
Pages : 345
Book Description
"The Review of Marketing Research" series provides current, state-of-the-art articles by the marketing field's leading researchers and scholars. Unlike other research publications in the field, which impose major constraint on article length, RMR publishes longer chapters that are not only theoretically rigorous but also offer richer detail, including literature reviews, cutting-edge methodologies, empirical studies, international developments, guidelines for implementation, and suggestions for future theory development and testing. "The RMR" series is edited by Naresh K. Malhotra along with a distinguished editorial review board. Each contribution undergoes a double-blind review process, and each volume represents an across-the-board view of the full range of current marketing research methodologies.
Consumer Learning, Switching Costs, and Heterogeneity
Author: Matthew OsbornePublisher:
ISBN:
Category : Brand loyalty
Languages : en
Pages : 68
Book Description
Consumer Learning, Switching Costs, and Heterogeneity
Author: Matthew OsbornePublisher: BiblioGov
ISBN: 9781289092177
Category :
Languages : en
Pages : 74
Book Description
I formulate an econometric model of consumer learning and experimentation about new products in markets for packaged goods that nests alternative sources of dynamics. The model is estimated on household level scanner data of laundry detergent purchases, and the results suggest that consumers have very similar expectations of their match value with new products before consumption experience with the good, but once consumers have learned their true match values they are very heterogeneous. I demonstrate that resolving consumer uncertainty about the new products increases market shares by 24 to 58%. The estimation results also suggest significant switching costs: removing switching costs increases new product market shares by 12 to 23%. Using counterfactual computations derived from the estimates of the structural demand model, I demonstrate that the presence of switching costs with learning changes the implications of the standard empirical learning model: the intermediate run impact of an introductory price cut on a new product's market share is significantly greater when the only source of dynamics is switching costs as opposed to when both learning and switching costs are present, which suggests that firms should combine price cuts with introductory advertising or free samples to increase their impact.
Optimal Price Adjustment when Consumers are Learning the Dependence of Quality on Price
Author: Josef FalkingerA Theory of Price Adjustment Under Loss Aversion
Author: Steffen AhrensPublisher:
ISBN:
Category : Consumer behavior
Languages : en
Pages : 30
Book Description
We present a new partial equilibrium theory of price adjustment, based on consumer loss aversion. In line with prospect theory, the consumers' perceived utility losses from price increases are weighted more heavily than the perceived utility gains from price decreases of equal magnitude. Price changes are evaluated relative to an endogenous reference price, which depends on the consumers' rational price expectations from the recent past. By implication, demand responses are more elastic for price increases than for price decreases and thus firms face a downward-sloping demand curve that is kinked at the consumers' reference price. Firms adjust their prices flexibly in response to variations in this demand curve, in the context of an otherwise standard dynamic neoclassical model of monopolistic competition. The resulting theory of price adjustment is starkly at variance with past theories. We find that - in line with the empirical evidence - prices are more sluggish upwards than downwards in response to temporary demand shocks, while they are more sluggish downwards than upwards in response to permanent demand shocks.
Altruistic dynamic pricing with customer regret
Author: Julio RotembergPublisher:
ISBN:
Category : Prices
Languages : en
Pages : 46
Book Description
A model is considered where firms internalize the regret costs that consumers experience when they see an unexpected price change. Regret costs are assumed to be increasing in the size of price changes and this can explain why the size of price increases is less sensitive to inflation than in models with fixed costs of changing prices. The latter predict unrealistically large responses of price changes to inflation for firms that do not frequently reduce their prices. Adjustment costs that depend on the size of price changes also raise the variability on the size of price increases. Lastly, it is argued that the common practice of announcing price increases in advance is much easier to rationalize with regret concerns by consumers than with more standard approaches to price rigidity.