Overpredicting and Underprofiting in Pricing Decisions
Bibliographic Data
| ID | 12166553 |
|---|---|
| Authors | Luxi Shen (0000-0002-6538-8881, Booth School of Business University of Chicago Chicago IL USA, corresponding author), Christopher K Hsee (0000-0002-8391-7847, Booth School of Business University of Chicago Chicago IL USA), Qingsheng Wu (Antai College of Economics and Management Shanghai Jiao Tong University Shanghai China), Claire I Tsai (0000-0002-3896-2323, Rotman School of Management University of Toronto Toronto Ontario Canada) |
| Year | 2011 |
| Volume | 25 |
| Issue | 5 |
| Pages | 512-521 |
| Publication date | 2011-08-21 |
| Peer Reviewed | Yes |
| Open Access | Yes |
| Type | ARTICLE |
| Venue | Journal of Behavioral Decision Making (JOURNAL) |
| Journal identifiers | ISSN: 0894-3257 • E-ISSN: 1099-0771 |
| Publisher | Wiley (PUBLISHER • GB) |
| DOI | 10.1002/bdm.746 |
| OpenAlex | W2150333374 |
| Language | EN |
| Citations received | 5 |
| References cited | 39 |
This research examines sellers' price‐setting behavior and discovers a naturally occurring mismatch between sellers and buyers: Sellers who make a price decision often consider alternative prices and engage in the joint evaluation mode, whereas buyers who make a purchase decision see only the finally set price and are in the single evaluation mode. This mismatch in evaluation modes leads sellers to overpredict buyers' price sensitivity and underprice their products. However, these effects apply only to products unfamiliar to buyers and without salient reference prices and can be alleviated if sellers are encouraged to mimic single evaluation when making pricing decisions. These propositions are empirically tested and verified. Copyright © 2011 John Wiley & Sons, Ltd
Business · Economics · Microeconomics · Mode (computer interface · Salient · Set (abstract data type · Computer Science · Consumer Market Behavior and Pricing · Decision-Making and Behavioral Economics · Experimental Behavioral Economics Studies
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| Unique citing works | 5 |
|---|---|
| Citations per year | 0,38 |
| Citation span | 2013 - 2023 (11) |
| Citation velocity | historical |
| Highly cited | No |
| Citation types | Neutral: 5 |