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Pricing as Communication and Strategic Response
Başlık:
Pricing as Communication and Strategic Response
Yazar:
Moon, Jihwan, author.
ISBN:
9780438121812
Yazar Ek Girişi:
Fiziksel Tanımlama:
1 electronic resource (98 pages)
Genel Not:
Source: Dissertation Abstracts International, Volume: 79-11(E), Section: A.
Özet:
Sellers use pricing for different purposes. In the first two chapters, we show that sellers can use bundling to signal the product popularity. Many sellers bundle add-ons (e.g., in-flight entertainment, hotel amenities) with core services (e.g., transportation, lodging). One surprising empirical finding is that consumers often believe bundle frames provide greater value than equivalent unbundle frames (i.e., $10 > $9 + $1) despite equal all-inclusive prices. Although these context or framing effects appear irrational in isolation, the bundle-framing effect might reflect market relationships caused by underlying seller motives. We show that bundling can signal information about product popularity. Specifically, only sellers of popular add-ons (e.g., standard side salads and popular excursions) have the incentive to bundle their add-ons with their core (e.g., restaurant entrees and cruise trips). In contrast, sellers with niche add-ons (e.g., exotic side salads and unusual excursions) find bundling undesirable because they lose core revenue. Consequently, bundling conveys information about horizontally differentiated markets even when the total inclusive price equals that of unbundling. Perhaps, some presumed consumer biases can reveal market relationships. Frames provide information about the framer.
Chapter 3 shows that firms can time their pricing to respond to external shocks. Given recurring environmental shocks, to survive, firms require optimal pricing response strategies that consider both timing and pass-through. We model these strategies in markets with vertically differentiated firms experiencing an adverse cost shock. We find when to respond (i.e., timing) matters. Low-quality (low-margin) firms have greater opportunity costs of waiting to respond, causing them to suffer double jeopardy. Low-quality firms lose customers and only obtain partial pass-through because they must immediately raise prices. However, high-quality (high-margin) firms can temporarily absorb the cost shock, i.e., retain their pre-shock prices, for strategic advantage. This waiting strategy allows high-quality firms to gain market share by capturing some consumers from low-quality firms. After the high-quality firms' new (forward-looking) consumers acclimate, high-quality firms adopt prices that more than fully pass through the cost shock. We find analogous results when firms must decide the timing of new add-on fees. We check the consistency of our model's predictions with empirical observations in the U.S. airline industry.
Notlar:
School code: 0070
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Yer Numarası | Demirbaş Numarası | Shelf Location | Lokasyon / Statüsü / İade Tarihi |
---|---|---|---|
XX(696625.1) | 696625-1001 | Proquest E-Tez Koleksiyonu | Arıyor... |
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