Dynamic pricing with reference price effect and price-matching policy in the presence of strategic consumers

Zhao, Nenggui; Wang, Qiang; Cao, Ping; Wu, Jie

doi:10.1080/01605682.2018.1510809

Cited by 35 publications

(20 citation statements)

References 32 publications

Supporting

Mentioning

Contrasting

Order By: Relevance

“…In some studies, reference prices refer to the products' historical prices [27,28]; Other studies argue that reference price is constructed from prices of similar products at the point of purchase [29]. Preview study related to reference price effects considers the impact of reference prices on consumer decisions [30][31][32] and strategy behavior [33,34], firms' dynamic pricing strategic decisions [35][36][37], revenue management [38] and finite memory [39].…”

Section: Literature Reviewmentioning

confidence: 99%

Strategic Analysis of the Pricing Mechanisms in an Online Book Supply Chain in the Presence of Reference Price Effects

Hou¹,

Zeng²

2021

JTAER

View full text Add to dashboard Cite

(1) Background: A binding recommended retail price has been used in several markets in a variety of forms, and the book market is a typical example. Publishers sell books to online retailers at a unit wholesale discount computed on the cover price. Retailers are then allowed to set the retail price. Therefore, if consumers regard the cover prices as reference points, then they may be more likely to purchase books if retail prices are lower than the cover prices. (2) Methods: We develop a Stackelberg game model for a book supply chain to investigates how reference price effects affect retailers and publisher’s pricing strategies. (3) Results: The results show that retailers will sell printed books at a discount only when the publisher’s wholesale discount rate is not high. Further, as the intensity of the reference price effects increases, (a) the lower boundary of the wholesale discount rate rises, (b) publishers’ profits increase and (c) retailers’ profits increase relative to the level of consumers’ e-books acceptance. (4) Conclusions: This result is related to the fact that the online retailer, such as Amazon and JD.com, like to invoke reference price effects in consumers’ minds by highlighting the printed book’s discount rate.

show abstract

Section: Literature Reviewmentioning

confidence: 99%

Strategic Analysis of the Pricing Mechanisms in an Online Book Supply Chain in the Presence of Reference Price Effects

Hou¹,

Zeng²

2021

JTAER

View full text Add to dashboard Cite

show abstract

“…Du and Chen take into account the uncertainty of the number of strategic consumers and the uncertainty of product evaluation in the market, studying the pricing strategy of new product, finding that the applicable conditions of the two pricing strategies of skimming pricing and penetration pricing [18]. Some scholars separately study the impact of consumers' strategic behavior on pricing in different situations such as product demand learning [19], quality information disclosure [20], cost reduction [21], reference price effects [22,23], e-commerce platforms [24], and two alternative products (low-carbon products and ordinary products) [25].…”

Section: Literature Reviewmentioning

confidence: 99%

Dynamic Contract Design of Product‐Service Supply Chain considering Consumers’ Strategic Behavior and Service Quality

et al. 2021

View full text Add to dashboard Cite

With increasing market competition and rapid development of service economy, more and more enterprises are shifting from providing products or services to providing product-service systems (PSSs) that integrate products and services, in order to improve competitiveness and profitability. Meanwhile, consumers have strategic delayed purchasing behavior when purchasing the PSS and high requirements for service quality. This paper investigates the two-period pricing and service quality decisions of product-service supply chain (PSSC) considering consumers’ strategic behavior under decentralized and centralized scenarios. The equilibrium results are compared in two scenarios. In order to eliminate performance loss under the decentralized scenario, we design two-period dynamic contracts to coordinate the PSSC. Furthermore, numerical simulation is provided to verify the feasibility of the contracts. The following conclusions can be drawn: (1) the higher the service input-efficiency, the more beneficial for alleviating consumers’ strategic purchase behavior under two scenarios, but this mitigation effect is more obvious under the centralized scenario. (2) Compared with the centralized scenario, the service quality is lower, the two-period PSS sales prices are higher, and the two-period profit is lower under the decentralized scenario. The proportion of service valuation (accounts for the valuation of PSS) will promote the widening of the service quality gap under two scenarios, but in some cases, the service input-efficiency will weaken the promotion effect of the proportion of service valuation. (3) The design of the two-period combined contracts depends on the proportion of service valuation. When the proportion of service valuation is high, the “two-period revenue sharing + service-cost sharing” combined dynamic contract can achieve PSSC perfect coordination. However, when the proportion of service valuation is low, it is necessary to design complexity combined dynamic contract which can achieve PSSC perfect coordination.

show abstract

“…The literature on strategic consumers focuses mainly on determining optimal price policies and the combination of strategic consumer behavior and two-period selling [7][8][9][10][11][12]. Zhao et al [13] demonstrate the single and combined effects of reference price and price-matching on the purchasing behavior of consumers. These works mainly studied the time of purchase for strategic consumers.…”

Section: Literature Reviewmentioning

confidence: 99%

Stocking Decisions for a Firm With the Presence of Prudent Consumers

Han

Zhou

2020

IEEE Access

View full text Add to dashboard Cite

This paper examines the stocking quantity for a firm in the presence of prudent consumers. First, we analyze the conditions for prudent consumers to purchase products based on the estimations of perceived value bias and product availability, and then solve the firm's optimal stocking decisions. We observe that if the firm wants to determine an optimal stocking quantity to maximize the expected profit, it must search for more information about prudent consumers' perceived value bias, return cost, and estimates of product availability. We further compare prudent and myopic consumers and analyze how the firm's optimal stocking quantity would change when facing these two types of consumers. This result indicates the firm facing prudent consumers should take measures (such as increasing stocking quantity or providing relevant information) to increase the perception of product availability; however, when consumers in a market are myopic, the firm should properly increase the consumers' return cost by increasing compensation to the firm for returned products.

show abstract

Dynamic pricing with reference price effect and price-matching policy in the presence of strategic consumers

Cited by 35 publications

References 32 publications

Strategic Analysis of the Pricing Mechanisms in an Online Book Supply Chain in the Presence of Reference Price Effects

Strategic Analysis of the Pricing Mechanisms in an Online Book Supply Chain in the Presence of Reference Price Effects

Dynamic Contract Design of Product‐Service Supply Chain considering Consumers’ Strategic Behavior and Service Quality

Stocking Decisions for a Firm With the Presence of Prudent Consumers

Contact Info

Product

Resources

About