Am I Getting a Good Deal? Reference-Dependentdecision Making When the Reference Price is Uncertain PDF Download
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Author: Vincenzina Caputo
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
Models of consumer decision making commonly incorporate reference dependent preferences. In these models, the reference point is typically assumed to be known by the consumer. However, research on price recall and the reference formation process reveals that the reference price is often uncertain at the time of purchase. Reference price uncertainty creates ambiguity for the consumer about whether they are getting a good or bad deal. This paper develops a model of consumer choice in the presence of reference dependent preferences when the reference price is uncertain. Data from two empirical studies that vary the product category and order of the elicitation of reference prices show that the new model generally outperforms conventional discrete choice models that either ignore reference prices or treat reference prices as certain. The new model provides insights into the effect of reducing reference price uncertainty on consumer choice, and reveals that high uncertainty smoothes the kink in the demand curve that is present in traditional reference-price demand models.
Author: Vincenzina Caputo
Publisher:
ISBN:
Category :
Languages : en
Pages : 0
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Book Description
Models of consumer decision making commonly incorporate reference dependent preferences. In these models, the reference point is typically assumed to be known by the consumer. However, research on price recall and the reference formation process reveals that the reference price is often uncertain at the time of purchase. Reference price uncertainty creates ambiguity for the consumer about whether they are getting a good or bad deal. This paper develops a model of consumer choice in the presence of reference dependent preferences when the reference price is uncertain. Data from two empirical studies that vary the product category and order of the elicitation of reference prices show that the new model generally outperforms conventional discrete choice models that either ignore reference prices or treat reference prices as certain. The new model provides insights into the effect of reducing reference price uncertainty on consumer choice, and reveals that high uncertainty smoothes the kink in the demand curve that is present in traditional reference-price demand models.
Author: David Prakash
Publisher: BoD – Books on Demand
ISBN: 3754359932
Category : Business & Economics
Languages : en
Pages : 156
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Book Description
Digital technologies are driving the application of dynamic pricing. Today, this pricing strategy is used not only for perishable products such as flights or hotel rooms, but for almost any product or service category. With dynamic pricing, retailers frequently adjust their prices over time to respond to factors such as demand, their supply and that of competitors, or the time of sale. Additionally, dynamic pricing allows retailers to take advantage of a large share of consumers' willingness to pay while avoiding losses from unsold products. Ultimately, this can lead to an increase in revenue and profit. However, the application of dynamic pricing comes with great challenges. In addition to the technological implementation, companies have to take into account that dynamic pricing can cause complex and unintended behavioral consequences on the consumer side. The key objective of this dissertation is to provide a deeper understanding of the impact of dynamic pricing on consumer behavior. To this end, this dissertation presents insights from four perspectives. First, how reference prices as a critical component in purchase decisions are operationalized. Second, how customers search for products priced dynamically, differentiated by business and private customers, as well as by different devices used for the search. Third, whether and how dynamic pricing influences the impact of internal reference prices on purchase decisions. Finally, this dissertation demonstrates that consumers perceive price changes as personalized in different purchase contexts, leading to reduced perceptions of fairness and undesirable behavioral consequences.
Author: Camila Back
Publisher: BoD – Books on Demand
ISBN: 3756232484
Category : Business & Economics
Languages : en
Pages : 222
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Book Description
The use of digital technologies have given rise to new forms of customer-firm interactions (e.g., the use of digital assistants in customer service). The shift towards digitization of customer-firm interactions enables a wide and easily scalable new set of offerings to consumers. From a consumer perspective, the increased use of digital technologies constantly shape individual decisions and attitudes towards firms. This dissertation examines the extent to which customers benefit from these technological advances by taking on a behavioral economics perspective. The main focus of the dissertation lies on two aspects which are highly relevant for firms: (i) customer satisfaction, and (ii) the quality of customers' economic decisions. The dissertation employs a wide set of methods (theoretical modelling, analysis of experimental data, analysis of observational data) and consists of three articles. Article 1 is conceptual in nature and lays the theoretical foundation by providing theoretical insights on customer-related decision processes from a behavioral economics perspective. Article 2 looks at how the availability and presentation of information influences customer satisfaction. The focus of Article 3 lies on technology's impact on economic decision making with a particular interest on automated investment advice from a robo-advisor, and the role of social design elements.
Author: Evelyn Stommel
Publisher: Springer Science & Business Media
ISBN: 3658006358
Category : Business & Economics
Languages : en
Pages : 229
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Book Description
Most of our daily decisions are made under uncertainty and risk, without complete information about all relevant aspects. We all constantly make such decisions, from the simplest “should I take my raincoat today?” to more serious examples, such as those on investment and portfolio decisions, holding of shares, insurance patterns, or negotiation processes. Within these situations, the bounded rationality of individuals and institutions towards risk and uncertainty is embedded. The central theory underlying this study is prospect theory, an adequate model to predict the real and most often bounded rationality of human behavior given certain incentives, preferences, and constraints. Evelyn Stommel investigates a crucial question within behavioral economics, namely the research on reference points within human decision making processes. Based on experimental investigations, she focuses three key challenges: what constitutes a reference point, the process of the formation of a reference point, and factors influencing the formation of reference points.
Author: Lionel Page
Publisher: Cambridge University Press
ISBN: 1009209183
Category : Business & Economics
Languages : en
Pages : 321
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Book Description
For a long time, economists have assumed that we were cold, self-centred, rational decision makers – so-called Homo economicus; the last few decades have shattered this view. The world we live in and the situations we face are of course rich and complex, revealing puzzling aspects of our behaviour. Optimally Irrational argues that our improved understanding of human behaviour shows that apparent 'biases' are good solutions to practical problems – that many of the 'flaws' identified by behavioural economics are actually adaptive solutions. Page delivers an ambitious overview of the literature in behavioural economics and, through the exposition of these flaws and their meaning, presents a sort of unified theory of behaviouralism, cognitive psychology and evolutionary biology. He gathers theoretical and empirical evidence about the causes of behavioural 'biases' and proposes a big picture of what the discipline means for economics.
Author: Lisa Dianne Ordóñez
Publisher:
ISBN:
Category :
Languages : en
Pages : 230
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Book Description
Author: David E. Bell
Publisher: Thomson South-Western
ISBN:
Category : Business & Economics
Languages : en
Pages : 228
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Book Description
These authors draw on nearly 50 years of combined teaching and consulting experience to give readers a straightforward yet systematic approach for making estimates about the likelihood and consequences of future events -- and then using those assessments to arrive at sound decisions. The book's real-world cases, supplemented with expository text and spreadsheets, help readers master such techniques as decision trees and simulation, such concepts as probability, the value of information, and strategic gaming; and such applications as inventory stocking problems, bidding situations, and negotiating.
Author: Luigi Luini
Publisher: Springer Science & Business Media
ISBN: 1461550831
Category : Business & Economics
Languages : en
Pages : 360
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Book Description
Uncertain Decisions: Bridging Theory and Experiments presents advanced directions of thinking on decision theory - in particular the more recent contributions on non-expected utility theory, fuzzy decision theory and case-based theory. This work also provides theoretical insights on measures of risk aversion and on new problems for general equilibrium analysis. It analyzes how the thinking that underlies the theories described above spills over into real decisions, and how the thinking that underlies these real decisions can explain the discrepancies between theoretical approaches and actual behavior. This work elaborates on how the most recent laboratory experiments have become an important source both for evaluating the leading theory of choice and decision, and for contributing to the formation of new models regarding the subject.
Author:
Publisher: World Health Organization
ISBN: 9240011870
Category : Business & Economics
Languages : en
Pages : 70
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Book Description
In recent years, high prices of pharmaceutical products have posed challenges in high- and low-income countries alike. In many instances, high prices of pharmaceutical products have led to significant financial hardship for individuals and negatively impacted on healthcare systems' ability to provide population-wide access to essential medicines. Pharmaceutical pricing policies need to be carefully planned, carried out, and regularly checked and revised according to changing conditions. Strong, well-thought-out policies can guide well-informed and balanced decisions to achieve affordable access to essential health products. This guideline replaces the 2015 WHO guideline on country pharmaceutical pricing policies, revised to reflect the growing body of literature since the last evidence review in 2010. This update also recognizes country experiences in managing the prices of pharmaceutical products.
Author: Roy F. Baumeister
Publisher: SAGE Publications
ISBN: 1452265682
Category : Psychology
Languages : en
Pages : 1249
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Book Description
"The set offers clear descriptions of commonly used and sometimes misunderstood terms, e.g., cultural differences, authoritarian personality, and neuroticism. The field has expanded since publication of The Blackwell Encyclopedia of Social Psychology, ed. by A. Manstead and M. Hewstone et al. (CH, Jan ′96, 33-2457), and this work is a valuable response to that. Summing Up: Recommended. All levels." —CHOICE Not long ago, social psychology was a small field consisting of creative, energetic researchers bent on trying to study a few vexing problems in normal adult human behavior with rigorous scientific methods. In a few short decades, the field has blossomed into a major intellectual force, with thousands of researchers worldwide exploring a stunningly diverse set of fascinating phenomena with an impressive arsenal of research methods and ever more carefully honed theories. The Encyclopedia of Social Psychology is designed as a road map to this rapidly growing and important field and provides individuals with a simple, clear, jargon-free introduction. These two volumes include more than 600 entries chosen by a diverse team of experts to comprise an exhaustive list of the most important concepts. Entries provide brief, clear, and readable explanations to the vast number of ideas and concepts that make up the intellectual and scientific content in the area of social psychology. Key Features Provides background to each concept, explains what researchers are now doing with it, and discusses where it stands in relation to other concepts in the field Translates jargon into plain, clear, everyday language rather than speaking in the secret language of the discipline Offers contributions from prominent, well-respected researchers extending over the many subfields of social psychology that collectively have a truly amazing span of expertise Key Themes Action Control Antisocial Behaviors Attitude Culture Emotions Evolution Groups Health History Influence Interpersonal Relationships Judgment and Decision Making Methods Personality Prejudice Problem Behaviors Prosocial Behaviors Self Social Cognition Subdisciplines The Encyclopedia of Social Psychology is the first resource to present students, researchers, scholars, and practitioners with state-of-the-art research and ready-to-use facts from this fascinating field. It is a must have resource for all academic libraries.
