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Author: Xin Zhang
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
The proliferation of consumer data and advanced data analytics techniques (e.g., machine learning), has empowered firms to implement personalized pricing by learning individual consumer preferences. Behavioral research and anecdotal evidence suggest that consumers exhibit aversion to such a pricing practice for various reasons, such as fear of price fraud, perceived violation of social norms, unfairness, privacy concerns, etc. However, little research has examined how consumers' aversion, which inflicts a disutility on consumers, influences the impact of personalized pricing on firms and consumers in a competitive setting. Using a game-theoretic model, we investigate the effect of consumers' aversion when competing firms use personalized pricing in a market where firms have differing extents of information access to different consumer segments (i.e., different consumer addressability). Interestingly, our result shows that personalized pricing does not necessarily hurt consumers even we consider consumers are averse to it. Contrary to conventional wisdom, firms' profits from conducting personalized pricing may increase with consumers' aversion level, whereas consumer surplus decreases. The driving force is that a high aversion level enables firms to poach exclusive target consumers of the rival firm at a high uniform price. Finally, when consumers' aversion is not very high, greater exclusive access to consumer data can work against the firms. Our findings provide implications for managers on using consumer data for personalized pricing and add to policy debates on how personalized pricing could affect consumer interests.
Author: Xin Zhang
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
The proliferation of consumer data and advanced data analytics techniques (e.g., machine learning), has empowered firms to implement personalized pricing by learning individual consumer preferences. Behavioral research and anecdotal evidence suggest that consumers exhibit aversion to such a pricing practice for various reasons, such as fear of price fraud, perceived violation of social norms, unfairness, privacy concerns, etc. However, little research has examined how consumers' aversion, which inflicts a disutility on consumers, influences the impact of personalized pricing on firms and consumers in a competitive setting. Using a game-theoretic model, we investigate the effect of consumers' aversion when competing firms use personalized pricing in a market where firms have differing extents of information access to different consumer segments (i.e., different consumer addressability). Interestingly, our result shows that personalized pricing does not necessarily hurt consumers even we consider consumers are averse to it. Contrary to conventional wisdom, firms' profits from conducting personalized pricing may increase with consumers' aversion level, whereas consumer surplus decreases. The driving force is that a high aversion level enables firms to poach exclusive target consumers of the rival firm at a high uniform price. Finally, when consumers' aversion is not very high, greater exclusive access to consumer data can work against the firms. Our findings provide implications for managers on using consumer data for personalized pricing and add to policy debates on how personalized pricing could affect consumer interests.
Author: Jean-Pierre Dubé
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
We study the welfare implications of personalized pricing, an extreme form of third-degree price discrimination implemented with machine learning for a large, digital firm. Using data from a unique randomized controlled pricing field experiment we train a demand model and conduct inference about the effects of personalized pricing on firm and consumer surplus. In a second experiment, we validate our predictions in the field. The initial experiment reveals unexercised market power that allows the firm to raise its price optimally, generating a 55% increase in profits. Personalized pricing improves the firm's expected posterior profits by an additional 19%, relative to the optimized uniform price, and by 86%, relative to the firm's unoptimized status quo price. Turning to welfare effects on the demand side, total consumer surplus declines 23% under personalized pricing relative to uniform pricing, and 47% relative to the firm's unoptimized status quo price. However, over 60% of consumers benefit from lower prices under personalization and total welfare can increase under standard inequity-averse welfare functions. Simulations with our demand estimates reveal a non-monotonic relationship between the granularity of the segmentation data and the total consumer surplus under personalization. These findings indicate a need for caution in the current public policy debate regarding data privacy and personalized pricing insofar as some data restrictions may not per se improve consumer welfare.
Author: Anindya Ghose
Publisher:
ISBN:
Category :
Languages : en
Pages : 50
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Book Description
We embed the principal-agent model in a model of spatial differentiation with correlated consumer preferences to investigate the competitive implications of personalized pricing and quality allocation (PPQ), whereby duopoly firms charge different prices and offer different qualities to different consumers, based on their willingness-to-pay. Our model sheds light on the equilibrium product-line pricing and quality schedules offered by firms, given that none, one, or both firms implement PPQ. The adoption of PPQ has three effects in our model: it enables firms to extract higher rents from loyal customers, intensifies price competition for non-loyal customers, and eliminates cannibalization from customer self-selection. Contrary to prior literature on one-to-one marketing and price discrimination, we show that even symmetric firms can avoid the well-known Prisoner's Dilemma problem when they engage in personalized pricing and quality customization. When both firms have PPQ, consumer surplus is non-monotonic in valuations such that some low valuation consumers get higher surplus than high valuation consumers. The adoption of PPQ can reduce information asymmetry, and therefore sellers offer higher quality products after the adoption of PPQ. Overall, we find that while the simultaneous adoption of PPQ generally improves total social welfare and firm profits, it decreases total consumer surplus.
Author: Hermann Simon
Publisher: Springer
ISBN: 3319204009
Category : Business & Economics
Languages : en
Pages : 231
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Book Description
The world’s foremost expert on pricing strategy shows how this mysterious process works and how to maximize value through pricing to company and customer. In all walks of life, we constantly make decisions about whether something is worth our money or our time, or try to convince others to part with their money or their time. Price is the place where value and money meet. From the global release of the latest electronic gadget to the bewildering gyrations of oil futures to markdowns at the bargain store, price is the most powerful and pervasive economic force in our day-to-day lives and one of the least understood. The recipe for successful pricing often sounds like an exotic cocktail, with equal parts psychology, economics, strategy, tools and incentives stirred up together, usually with just enough math to sour the taste. That leads managers to water down the drink with hunches and rules of thumb, or leave out the parts with which they don’t feel comfortable. While this makes for a sweeter drink, it often lacks the punch to have an impact on the customer or on the business. It doesn’t have to be that way, though, as Hermann Simon illustrates through dozens of stories collected over four decades in the trenches and behind the scenes. A world-renowned speaker on pricing and a trusted advisor to Fortune 500 executives, Simon’s lifelong journey has taken him from rural farmers’ markets, to a distinguished academic career, to a long second career as an entrepreneur and management consultant to companies large and small throughout the world. Along the way, he has learned from Nobel Prize winners and leading management gurus, and helped countless managers and executives use pricing as a way to create new markets, grow their businesses and gain a sustained competitive advantage. He also learned some tough personal lessons about value, how people perceive it, and how people profit from it. In this engaging and practical narrative, Simon leaves nothing out of the pricing cocktail, but still makes it go down smoothly and leaves you wanting to learn more and do more—as a consumer or as a business person. You will never look at pricing the same way again.
Author: Alan H. Gelb
Publisher: Oxford University Press
ISBN: 9780195207743
Category : Business & Economics
Languages : en
Pages : 376
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Book Description
This book assesses the full impact of oil windfalls on six developing producer countries - Algeria, Ecuador, Indonesia, Nigeria, Trinidad and Tobago, and Venezuela. This is the first time that the issue has been systematically analysed and related to economics policies and underlying macroeconomic characteristics. The book adopts a broad approach, blending institutional and political aspects with quantitative analysis which includes the results of sophisticated model simulations. It presents new information on how oil discoveries have been used by producer governments, and analyses of the consequences. Finally it concludes that much of the potential benefit to producers has been dissipated, and explains why producers may actually end up worse off despite revenue gains.
Author: Friedrich List
Publisher:
ISBN:
Category : Economics
Languages : en
Pages : 422
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Book Description
Author: Barry Schwartz
Publisher: Harper Collins
ISBN: 0061748994
Category : Psychology
Languages : en
Pages : 308
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Book Description
Whether we're buying a pair of jeans, ordering a cup of coffee, selecting a long-distance carrier, applying to college, choosing a doctor, or setting up a 401(k), everyday decisions—both big and small—have become increasingly complex due to the overwhelming abundance of choice with which we are presented. As Americans, we assume that more choice means better options and greater satisfaction. But beware of excessive choice: choice overload can make you question the decisions you make before you even make them, it can set you up for unrealistically high expectations, and it can make you blame yourself for any and all failures. In the long run, this can lead to decision-making paralysis, anxiety, and perpetual stress. And, in a culture that tells us that there is no excuse for falling short of perfection when your options are limitless, too much choice can lead to clinical depression. In The Paradox of Choice, Barry Schwartz explains at what point choice—the hallmark of individual freedom and self-determination that we so cherish—becomes detrimental to our psychological and emotional well-being. In accessible, engaging, and anecdotal prose, Schwartz shows how the dramatic explosion in choice—from the mundane to the profound challenges of balancing career, family, and individual needs—has paradoxically become a problem instead of a solution. Schwartz also shows how our obsession with choice encourages us to seek that which makes us feel worse. By synthesizing current research in the social sciences, Schwartz makes the counter intuitive case that eliminating choices can greatly reduce the stress, anxiety, and busyness of our lives. He offers eleven practical steps on how to limit choices to a manageable number, have the discipline to focus on those that are important and ignore the rest, and ultimately derive greater satisfaction from the choices you have to make.
Author: Ronald G. Cummings
Publisher: Rowman & Littlefield Publishers
ISBN:
Category : Business & Economics
Languages : en
Pages : 298
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Book Description
To find more information about Rowman and Littlefield titles, please visit www.rowmanlittlefield.com.
Author: Bruce A. Pasternack
Publisher: Crown Business
ISBN: 0307337316
Category : Business & Economics
Languages : en
Pages : 265
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Book Description
Every company has a personality. Does yours help or hinder your results? Does it make you fit for growth? Find out by taking the quiz that’s helped 50,000 people better understand their organizations at OrgDNA.com and to learn more about Organizational DNA. Just as you can understand an individual’s personality, so too can you understand a company’s type—what makes it tick, what’s good and bad about it. Results explains why some organizations bob and weave and roll with the punches to consistently deliver on commitments and produce great results, while others can’t leave their corner of the ring without tripping on their own shoelaces. Gary Neilson and Bruce Pasternack help you identify which of the seven company types you work for—and how to keep what’s good and fix what’s wrong. You’ll feel the shock of recognition (“That’s me, that’s my company”) as you find out whether your organization is: • Passive-Aggressive (“everyone agrees, smiles, and nods, but nothing changes”): entrenched underground resistance makes getting anything done like trying to nail Jell-O to the wall • Fits-and-Starts (“let 1,000 flowers bloom”): filled with smart people pulling in different directions • Outgrown (“the good old days meet a brave new world”): reacts slowly to market developments, since it’s too hard to run new ideas up the flagpole • Overmanaged (“we’re from corporate and we’re here to help”): more reporting than working, as managers check on their subordinates’ work so they can in turn report to their bosses • Just-in-Time (“succeeding, but by the skin of our teeth”): can turn on a dime and create real breakthroughs but also tends to burn out its best and brightest • Military Precision (“flying in formation”): executes brilliant strategies but usually does not deal well with events not in the playbook • Resilient (“as good as it gets”): flexible, forward-looking, and fun; bounces back when it hits a bump in the road and never, ever rests on its laurels For anyone who’s ever said, “Wow, that’s a great idea, but it’ll never happen here” or “Whew, we pulled it off again, but I’m tired of all this sprinting,” Results provides robust, practical ideas for becoming and remaining a resilient business. Also available as an eBook From the Hardcover edition.
Author: Richard R. Lindsey
Publisher: John Wiley & Sons
ISBN: 1118044754
Category : Business & Economics
Languages : en
Pages : 406
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Book Description
Praise for How I Became a Quant "Led by two top-notch quants, Richard R. Lindsey and Barry Schachter, How I Became a Quant details the quirky world of quantitative analysis through stories told by some of today's most successful quants. For anyone who might have thought otherwise, there are engaging personalities behind all that number crunching!" --Ira Kawaller, Kawaller & Co. and the Kawaller Fund "A fun and fascinating read. This book tells the story of how academics, physicists, mathematicians, and other scientists became professional investors managing billions." --David A. Krell, President and CEO, International Securities Exchange "How I Became a Quant should be must reading for all students with a quantitative aptitude. It provides fascinating examples of the dynamic career opportunities potentially open to anyone with the skills and passion for quantitative analysis." --Roy D. Henriksson, Chief Investment Officer, Advanced Portfolio Management "Quants"--those who design and implement mathematical models for the pricing of derivatives, assessment of risk, or prediction of market movements--are the backbone of today's investment industry. As the greater volatility of current financial markets has driven investors to seek shelter from increasing uncertainty, the quant revolution has given people the opportunity to avoid unwanted financial risk by literally trading it away, or more specifically, paying someone else to take on the unwanted risk. How I Became a Quant reveals the faces behind the quant revolution, offering you?the?chance to learn firsthand what it's like to be a?quant today. In this fascinating collection of Wall Street war stories, more than two dozen quants detail their roots, roles, and contributions, explaining what they do and how they do it, as well as outlining the sometimes unexpected paths they have followed from the halls of academia to the front lines of an investment revolution.
