Becoming Strategic: Endogenous Consumer Time Preferences and Multiperiod Pricing

Aflaki, Arian; Feldman, Pnina; Swinney, Robert

doi:10.1287/opre.2019.1937

Cited by 35 publications

(29 citation statements)

References 41 publications

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“…The second part represents the expected income for consumers who have paid the final payment. If E (1) (U ) ≥ 0, the simpli-…”

Section: π (I) Jmentioning

confidence: 99%

“…Strategic consumer behavior refers to the intertemporal shifting of consumer purchase decisions. That is, consumers strategically choose the best time to buy to maximize their utility [58], which can be followed by situations such as delayed purchases [40,17,1,26] and reference price dependence [21,16,46,59,10]. Simultaneously, ShopSavvy, Shopbrain, and other shopping price comparison software 9 , so that bounded consumer rationality reflected more prominent.…”

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confidence: 99%

“…Literature review. (1) The first part is about new retail. The concept of new retail has been proposed in recent years and has become a hotspot for scholarly research.…”

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confidence: 99%

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Pre-sale ordering strategy based on the new retail context considering bounded consumer rationality

Liu

Guo

Zhou

et al. 2023

JIMO

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<p style='text-indent:20px;'>The purpose of this paper is to study the impact of bounded consumer rationality on the order quantity and profitability of the seller in the advance period and the spot period in the context of the combination of new retail and pre-sale. In this paper, we develop a seller order model in the context of the combination of new retail and pre-sale, with and without reference price dependence. Besides, the model considers the order cancellation and delayed purchase behavior of consumers. We then discuss the optimal profit and optimal order quantity under different conditions and the effect of different reference price dependence and value-added offline service on them. Our research shows that: First, the seller tends to set the deposit too low in pre-sales. Second, reference price dependence has different effects on order quantities in different periods. The seller should pay more attention to the impact of reference price dependence. Third, on the whole, consumer rationality benefits the seller. The seller, or the public policymaker, can benefit new retail businesses by increasing consumer rationality. Last, in the new retail context, an increase in offline service value-added, even if it increases total order quantity, is not always beneficial to the seller and may reduce profits. Therefore, the seller should weigh all factors to determine the optimal value-added offline services.</p>

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“…The second part represents the expected income for consumers who have paid the final payment. If E (1) (U ) ≥ 0, the simpli-…”

Section: π (I) Jmentioning

confidence: 99%

mentioning

confidence: 99%

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Pre-sale ordering strategy based on the new retail context considering bounded consumer rationality

Liu

Guo

Zhou

et al. 2023

JIMO

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“…Given accuracy α t , the firm then prices and markets the product. The market in period t corresponds to a continuum of buyers of total mass normalized to one, a common framework in the pricing literature (e.g., Aflaki et al 2019, Feldman et al 2018, Yu et al 2015.…”

Section: Data Accuracy and Revenuementioning

confidence: 99%

Contracting, Pricing, and Data Collection Under the AI Flywheel Effect

Gürkan

Véricourt

2020

SSRN Journal

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“… Using “cost” terminology, see, e.g., Aflaki et al. (), this assumption means that the customer's cost of estimating total inventory is prohibitively higher than the cost of expectations

\overset{α}{true}

and

{\bar{p}}_{2}

, which are a byproduct of a regular buying practice and do not require additional efforts. …”

mentioning

confidence: 99%

Resale Price Maintenance with Strategic Customers

Бажанов

Levin

Nediak

2019

Production and Operations Management

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We consider a decentralized supply chain (DSC) under resale price maintenance (RPM) selling a limited‐lifetime product to forward‐looking customers with heterogeneous valuations. When customers do not know the inventory level, double marginalization under RPM leads to a higher profit and aggregate welfare than without RPM under a two‐part tariff contract (TT). Both RPM and TT profits are higher and aggregate welfare is lower than in a centralized supply chain (CSC). When customers know the inventory, RPM coincides with CSC. Thus, overestimation of customer awareness may lead to overcentralization of supply chains with profit loss comparable with the loss from strategic customers. The case of RPM with unknown inventory is extended to an arbitrary number of retailers with inventory‐independent and inventory‐dependent demand. In both cases, the manufacturer, by setting a higher wholesale price, mitigates the inventory‐increasing effect of competition and reaches the same profit as with a single retailer. The high viability and efficiency of RPM in using double marginalization as a strategic‐behavior‐mitigating tool may serve as another explanation of why manufacturers may prefer DSC with RPM to a vertically integrated firm.

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Becoming Strategic: Endogenous Consumer Time Preferences and Multiperiod Pricing

Abstract: Should Consumers Be Strategic?

Cited by 35 publications

References 41 publications

Pre-sale ordering strategy based on the new retail context considering bounded consumer rationality

Pre-sale ordering strategy based on the new retail context considering bounded consumer rationality

Contracting, Pricing, and Data Collection Under the AI Flywheel Effect

Resale Price Maintenance with Strategic Customers

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