Pricing Tactic Persuasion Knowledge (PTPK) refers to the personation knowledge of the consumers about the tactics used by marketers. This research discusses the persuasion tactics used by online stores to attract more customers to buy their product. The companies use persuasion so as to increase sales. Online stores use certain promotion methods such as discounts, cashback, coupons, etc. It is most commonly used on fashion apparels as promotions have value only till the season ends and after that, they lose their value due to change in season or trend.
{"title":"Influence of Pricing on Consumer Decision Making with Reference to E-commerce","authors":"Arjun Narayan","doi":"10.2139/ssrn.3540096","DOIUrl":"https://doi.org/10.2139/ssrn.3540096","url":null,"abstract":"Pricing Tactic Persuasion Knowledge (PTPK) refers to the personation knowledge of the consumers about the tactics used by marketers. This research discusses the persuasion tactics used by online stores to attract more customers to buy their product. The companies use persuasion so as to increase sales. Online stores use certain promotion methods such as discounts, cashback, coupons, etc. It is most commonly used on fashion apparels as promotions have value only till the season ends and after that, they lose their value due to change in season or trend.","PeriodicalId":321987,"journal":{"name":"ERN: Pricing (Topic)","volume":"53 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-02-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"117267020","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper obtains a comprehensive measure of non-price competitiveness factors (NPCFs) based on a simple international trade model. Trade frictions are reinterpreted as the NPCF’s conditions (inferior product quality, and suboptimal geographical and industry specialization of exports) that inhibit trade. The setup is applied to the five largest Euro Area economies for the period 2000-2017. NPCF have improved significantly in the Netherlands and Spain, mildly in Italy and Germany, and mildly worsened in France. This result helps explain the Spanish ’paradox’. It also suggests that the conventional North-South divide in the Euro Area might not be entirely applicable regarding NPCF.
{"title":"Overlooked in the Debate? Non-Price Competitiveness in the Five Largest Euro Area Countries","authors":"Ramon Xifré","doi":"10.2139/ssrn.3694998","DOIUrl":"https://doi.org/10.2139/ssrn.3694998","url":null,"abstract":"This paper obtains a comprehensive measure of non-price competitiveness factors (NPCFs)<br>based on a simple international trade model. Trade frictions are reinterpreted as the NPCF’s<br>conditions (inferior product quality, and suboptimal geographical and industry specialization<br>of exports) that inhibit trade. The setup is applied to the five largest Euro Area economies<br>for the period 2000-2017. NPCF have improved significantly in the Netherlands and Spain,<br>mildly in Italy and Germany, and mildly worsened in France. This result helps explain the<br>Spanish ’paradox’. It also suggests that the conventional North-South divide in the Euro Area<br>might not be entirely applicable regarding NPCF.","PeriodicalId":321987,"journal":{"name":"ERN: Pricing (Topic)","volume":"47 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-02-10","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116808958","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Muzeeb Shaik, N. Bosukonda, Vikas Mittal, Shrihari Sridhar
Previous research assumes an unconditionally positive association of perceived switching costs-financial, procedural and relational-with repurchase intentions. Building on the theory of context-dependent preference formation, the authors posit price sensitivity as a contextual factor that moderates the relationship of repurchase intentions with three different types of switching costs - financial, procedural and relational. Using a large-scale dataset (N=8,588) spanning multiple industries in the B2B domain, the authors show that price sensitivity moderates these associations such that: (1) the negative association of financial switching costs with repurchase intention is stronger when price sensitivity is low, (2) the positive association of procedural switching costs with repurchase intention is stronger when price sensitivity is low and (3) the positive association of relational switching costs with repurchase intentions is stronger when price sensitivity is high. Linking repurchase intentions to actual sales underscores the practical relevance of their results.
{"title":"Price Sensitivity and Customer Perceived Switching Costs in Business-to-Business Markets: Joint Effect on Customer Repurchase Intentions","authors":"Muzeeb Shaik, N. Bosukonda, Vikas Mittal, Shrihari Sridhar","doi":"10.2139/ssrn.3530532","DOIUrl":"https://doi.org/10.2139/ssrn.3530532","url":null,"abstract":"Previous research assumes an unconditionally positive association of perceived switching costs-financial, procedural and relational-with repurchase intentions. Building on the theory of context-dependent preference formation, the authors posit price sensitivity as a contextual factor that moderates the relationship of repurchase intentions with three different types of switching costs - financial, procedural and relational. Using a large-scale dataset (N=8,588) spanning multiple industries in the B2B domain, the authors show that price sensitivity moderates these associations such that: (1) the negative association of financial switching costs with repurchase intention is stronger when price sensitivity is low, (2) the positive association of procedural switching costs with repurchase intention is stronger when price sensitivity is low and (3) the positive association of relational switching costs with repurchase intentions is stronger when price sensitivity is high. Linking repurchase intentions to actual sales underscores the practical relevance of their results.","PeriodicalId":321987,"journal":{"name":"ERN: Pricing (Topic)","volume":"26 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-02-02","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"123143706","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We study price personalization in a two period duopoly with vertically differentiated products. In the second period a firm knows the purchase history of all customers, as in the standard Behavior Based Price Discrimination models. However in the second period it also has detailed personal information on its own customers, enabling it to quote personalized prices. The analysis reveals that there exists a natural market (nm) for each firm, defined as the set of customers that cannot be poached by the rival in period two. Since in equilibrium all contestable consumers belong to the largest nm, poaching will only be one way. The firm with the largest nm, has highest profits, but not necessarily the largest market share. All consumers gain from price personalization..Profits are lower than under uniform pricing. Quality choice is well defined for the low quality and a quality dfferential arises, though the exact choice for the high quality depends upon the cost specification.
{"title":"Behavior Based Price Personalization Under Vertical Product Dfferentiation","authors":"P. Garella, D. Laussel, J. Resende","doi":"10.2139/ssrn.3522465","DOIUrl":"https://doi.org/10.2139/ssrn.3522465","url":null,"abstract":"We study price personalization in a two period duopoly with vertically differentiated products. In the second period a firm knows the purchase history of all customers, as in the standard Behavior Based Price Discrimination models. However in the second period it also has detailed personal information on its own customers, enabling it to quote personalized prices. The analysis reveals that there exists a natural market (nm) for each firm, defined as the set of customers that cannot be poached by the rival in period two. Since in equilibrium all contestable consumers belong to the largest nm, poaching will only be one way. The firm with the largest nm, has highest profits, but not necessarily the largest market share. All consumers gain from price personalization..Profits are lower than under uniform pricing. Quality choice is well defined for the low quality and a quality dfferential arises, though the exact choice for the high quality depends upon the cost specification.","PeriodicalId":321987,"journal":{"name":"ERN: Pricing (Topic)","volume":"20 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-01-20","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"114628598","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We investigate the optimal choice of an auction deadline by a house seller who commits to this deadline before the arrival of any buyers. In our model buyers have evolving outside options, and their bidding behaviors change over time. We find that if the seller runs an optimal auction, then she should choose a longer deadline. However, if the seller runs a second-price auction, then a shorter deadline could potentially help her. Moreover, the seller can extract information about buyers' outside options by selling them contracts similar to European call options. Finally, the optimal dynamic mechanism is equivalent to setting a longer deadline and running an auction on the last day.
{"title":"How to Set a Deadline for Auctioning a House","authors":"A. Arefeva, Delong Meng","doi":"10.2139/ssrn.3520197","DOIUrl":"https://doi.org/10.2139/ssrn.3520197","url":null,"abstract":"We investigate the optimal choice of an auction deadline by a house seller who commits to this deadline before the arrival of any buyers. In our model buyers have evolving outside options, and their bidding behaviors change over time. We find that if the seller runs an optimal auction, then she should choose a longer deadline. However, if the seller runs a second-price auction, then a shorter deadline could potentially help her. Moreover, the seller can extract information about buyers' outside options by selling them contracts similar to European call options. Finally, the optimal dynamic mechanism is equivalent to setting a longer deadline and running an auction on the last day.","PeriodicalId":321987,"journal":{"name":"ERN: Pricing (Topic)","volume":"101 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2020-01-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"124138075","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper uses a new dataset from a major European credit card issuer to fill an important gap in the study of coalition loyalty program effectiveness by analyzing how complex spatial relationships influence card spend and redemption activity. A coalition program offers incentives to customers at multiple businesses; the primary challenge facing coalition managers is determining the value of each store in the network. We use detailed, individual-level transaction data to analyze how the spatial evolution of a coalition loyalty program network influences card usage and redemption activity. By augmenting traditional spatial models with advances in machine learning methods we are able to properly account for the influence of complex spatial interactions and provide actionable analyses to managers. Our results suggest that if the coalition reduces the size of their network to only include key branch locations estimated credit card revenue increases substantially.
{"title":"The Impact of Coalition Loyalty Program Evolution on Member Purchases and Redemptions","authors":"Wayne J. Taylor, Xiaojing Dong","doi":"10.2139/ssrn.3505587","DOIUrl":"https://doi.org/10.2139/ssrn.3505587","url":null,"abstract":"This paper uses a new dataset from a major European credit card issuer to fill an important gap in the study of coalition loyalty program effectiveness by analyzing how complex spatial relationships influence card spend and redemption activity. A coalition program offers incentives to customers at multiple businesses; the primary challenge facing coalition managers is determining the value of each store in the network. We use detailed, individual-level transaction data to analyze how the spatial evolution of a coalition loyalty program network influences card usage and redemption activity. By augmenting traditional spatial models with advances in machine learning methods we are able to properly account for the influence of complex spatial interactions and provide actionable analyses to managers. Our results suggest that if the coalition reduces the size of their network to only include key branch locations estimated credit card revenue increases substantially.","PeriodicalId":321987,"journal":{"name":"ERN: Pricing (Topic)","volume":"29 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-12-17","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115952536","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
Does the Cambridge equation, in which the rate of profits in a steady state is equal to the quotient of the rate of growth and the savings rate out of profits, hold in an economy with widespread non-competitive markets? This article presents a multiple-good model of markup pricing in an attempt to answer this question. A balance equation is derived. Given competitive conditions, this model can be used to derive the Cambridge equation. The Cambridge equation also holds in a special case of markup pricing, with one capital good and many consumption goods being produced. No definite conclusions are reached in the general case.
{"title":"Towards the Derivation of the Cambridge Equation with Expanded Reproduction and Markup Pricing","authors":"R. Vienneau","doi":"10.2139/ssrn.3507425","DOIUrl":"https://doi.org/10.2139/ssrn.3507425","url":null,"abstract":"Does the Cambridge equation, in which the rate of profits in a steady state is equal to the quotient of the rate of growth and the savings rate out of profits, hold in an economy with widespread non-competitive markets? This article presents a multiple-good model of markup pricing in an attempt to answer this question. A balance equation is derived. Given competitive conditions, this model can be used to derive the Cambridge equation. The Cambridge equation also holds in a special case of markup pricing, with one capital good and many consumption goods being produced. No definite conclusions are reached in the general case.","PeriodicalId":321987,"journal":{"name":"ERN: Pricing (Topic)","volume":"50 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-12-15","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"115240646","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper explores the strategic tradeoff between advertising and pricing when firms have asymmetric loyal market segments and also can compete for shoppers who purchase at the lowest advertised price. Two advertising structures consistent with real world settings are considered. In the first setting firms are limited to advertising campaigns that reach a chosen proportion of the entire market and present all consumers with a uniform price. The analysis is then extended to allow firms to target ads to specific market segments, both with and without the ability to price discriminate. Our model nests other well-known models as special cases and provides novel results. We find that targeted advertising may or may not increase social welfare, while it increases consumer surplus only if the cost of advertising is sufficiently high. In addition, it is possible the firm with the larger loyal segment earns lower profits under targeted rather than uniform advertising. Notwithstanding this, in an extension we show firms have incentive to invest ex-ante in targeting technology, even when they lack the ability to price discriminate.
{"title":"Advertising and Pricing in Markets with Asymmetric Customer Loyalty","authors":"Michael Arnold, Erich Schmidbauer, Lan Zhang","doi":"10.2139/ssrn.3658609","DOIUrl":"https://doi.org/10.2139/ssrn.3658609","url":null,"abstract":"This paper explores the strategic tradeoff between advertising and pricing when firms have asymmetric loyal market segments and also can compete for shoppers who purchase at the lowest advertised price. Two advertising structures consistent with real world settings are considered. In the first setting firms are limited to advertising campaigns that reach a chosen proportion of the entire market and present all consumers with a uniform price. The analysis is then extended to allow firms to target ads to specific market segments, both with and without the ability to price discriminate. Our model nests other well-known models as special cases and provides novel results. We find that targeted advertising may or may not increase social welfare, while it increases consumer surplus only if the cost of advertising is sufficiently high. In addition, it is possible the firm with the larger loyal segment earns lower profits under targeted rather than uniform advertising. Notwithstanding this, in an extension we show firms have incentive to invest ex-ante in targeting technology, even when they lack the ability to price discriminate.","PeriodicalId":321987,"journal":{"name":"ERN: Pricing (Topic)","volume":"27 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-11-18","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131637220","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
This paper examines the impact of e-commerce on pricing behavior and welfare. Using Japanese data, we find that the entry of e-commerce firms significantly raised the rate of intercity price convergence for goods sold intensively online, but not for other goods. E-commerce also lowered relative inflation rates for goods sold intensively online. We overcome data challenges using long data series and historical catalog sales as an instrument for e-commerce sales intensity. We estimate that reductions in price dispersion raised welfare by 0.3 percent. E-commerce also lowered variety-adjusted prices on average by 0.9 percent, and more in cities with highly educated populations.
{"title":"The Impact of E-Commerce on Relative Prices and Consumer Welfare","authors":"Yoon J. Jo, Misaki Matsumura, David E. Weinstein","doi":"10.3386/w26506","DOIUrl":"https://doi.org/10.3386/w26506","url":null,"abstract":"This paper examines the impact of e-commerce on pricing behavior and welfare. Using Japanese data, we find that the entry of e-commerce firms significantly raised the rate of intercity price convergence for goods sold intensively online, but not for other goods. E-commerce also lowered relative inflation rates for goods sold intensively online. We overcome data challenges using long data series and historical catalog sales as an instrument for e-commerce sales intensity. We estimate that reductions in price dispersion raised welfare by 0.3 percent. E-commerce also lowered variety-adjusted prices on average by 0.9 percent, and more in cities with highly educated populations.","PeriodicalId":321987,"journal":{"name":"ERN: Pricing (Topic)","volume":"31 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"116526136","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
We consider an economy where many sellers sell identical goods to many buyers. Each seller has a unit supply and each buyer has a unit demand. The only possible information flow about prices is through costly advertising. We show that in equilibrium the sellers use mixed strategies in pricing which leads to price and advertisement distributions. With convex advertising costs each seller sends only one advertisement in the market. We also delineate a class of advertising costs which ensures that sellers may send multiple advertisements in equilibrium.
{"title":"Equilibrium Price and Advertisement Distributions","authors":"K. Kultti, Teemu Pekkarinen","doi":"10.2139/ssrn.3479074","DOIUrl":"https://doi.org/10.2139/ssrn.3479074","url":null,"abstract":"We consider an economy where many sellers sell identical goods to many buyers. Each seller has a unit supply and each buyer has a unit demand. The only possible information flow about prices is through costly advertising. We show that in equilibrium the sellers use mixed strategies in pricing which leads to price and advertisement distributions. With convex advertising costs each seller sends only one advertisement in the market. We also delineate a class of advertising costs which ensures that sellers may send multiple advertisements in equilibrium.","PeriodicalId":321987,"journal":{"name":"ERN: Pricing (Topic)","volume":"17 1","pages":"0"},"PeriodicalIF":0.0,"publicationDate":"2019-11-01","publicationTypes":"Journal Article","fieldsOfStudy":null,"isOpenAccess":false,"openAccessPdf":"","citationCount":null,"resultStr":null,"platform":"Semanticscholar","paperid":"131377453","PeriodicalName":null,"FirstCategoryId":null,"ListUrlMain":null,"RegionNum":0,"RegionCategory":"","ArticlePicture":[],"TitleCN":null,"AbstractTextCN":null,"PMCID":"","EPubDate":null,"PubModel":null,"JCR":null,"JCRName":null,"Score":null,"Total":0}
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