strengthening the influence of advertised reference prices through information priming the use of advertised reference price promotions such as regularly 119 99 sale price 39 99 is ubiquitous in the marketplace thirty years of research supports the conclusion that advertised reference prices e g 119 99 exert an influence on consumers responses to offer prices e g 39 99 via their assimilative influence on consumers internal reference prices the present research provides an enriched account of this assimilation process specifically three studies show that increasing the overlap in information made accessible by the advertised reference price and information made accessible by the offer price increases the influence of the information primed by the advertised reference price on the construction of the internal reference price consequently the offer price is considered more attractive the identification of this process provides insight into additional variables that moderate the influence of advertised reference prices on downstream deal evaluations implications for theory practice and public policy are discussed

integration of discrepant sales forecasts the influence of plausibility inferences based on an evoked range abstract the authors hypothesize that when managers integrate two projections to form a sales estimate they evoke and use a sales range to judge inappropriately the plausibility of each projection this judged plausibility as well as the margin of error based on the market research company s typical accuracy is used to assign weights to each projection five experiments find strong evidence for this process and demonstrate a resulting bias

growth and the effects of inflation abstract in this paper we study the relationship between the rate of increase of the money supply and the rate of growth of output in an economy we show that in some models of endogenous growth inflation has direct effects on the growth rate of the economy despite this the estimated welfare cost of inflation from calibrated examples is similar to that found in exogenous growth models

contextual influences on perceptions of merchant supplied reference prices two contextual variables that have theoretical roots in information processing attribution and social judgment theories were manipulated along with three levels of merchant supplied reference price in a 2 2 3 analysis of variance design results support the hypothesized effects of consistency and distinctiveness as contextual variables that influence internal price standards and purchase evaluations the three price levels resulted in a curvilinear pattern of results for the purchase evaluation and source credibility dependent variables as hypothesized however contrary to assimilation contrast theory the impact of the merchant supplied reference price on estimates of normal and fair prices was monotonic

stimulus context and the formation of consumer ideals when a choice set consists of a distribution of alternatives with correlated benefits and costs consumers often exhibit single peaked preferences they prefer an alternative having moderate costs and benefits theories disagree about how adding additional lower benefit lower cost or higher benefit higher cost alternatives to this choice set will affect relative preferences for the initial set of alternatives prototype theory predicts that adding alternatives should produce assimilation whereas multiattribute range frequency theory predicts that it creates contrast we reconcile these two theories by assuming that single peaked preferences reflect a composition of underlying benefit and cost valuations moreover we claim that the correlational structure of the benefit and cost dimensions in the contextual stimuli determines whether these stimuli will exert an assimilation or contrast effect we show that when benefits and costs are correlated uncorrelated adding alternatives that extend the range of offerings produces assimilation contrast for preference judgments we propose a cost benefit trade off model that incorporates elements of single peaked preference theory and range frequency theory to explain the complex fashion in which contextual stimuli affect consumer ideals

consumer skepticism of advertising claims testing hypotheses from economics of information propositions regarding consumers differential skepticism for search experience and credence claims are tested in an experiment using adult consumers the results provide clear support for nelson s 1970 hypotheses that consumers are more skeptical of experience than search attribute claims and more skeptical of subjective than of objective claims no support is found however for the darby and kami 1973 hypothesis that consumers will be more skeptical of credence than of experience attribute claims or for the hypothesis that consumers will not be less skeptical of experience claims for low priced goods

consumer normal price estimation market versus personal standards in reference price models internal reference price is typically estimated from actual market prices given the generally poor price knowledge consumers have exhibited in prior research the question is whether it is reasonable to use actual market prices to estimate consumers internal reference price standards the initial answer provided in this research surprisingly is yes although internal reference prices are measurable and do affect consumer price perception the gains in measuring and using those standards in predicting brand choice for frequently purchased products may not be worth the costs reasons why the surrogate price measure may work and implications for the measurement of internal reference price standards are considered

learning from mixed feedback anticipation of the future reduces appreciation of the present consumers can evaluate their past choices by comparing their obtained outcome to other possible outcomes we demonstrate that how people process this comparative feedback depends on whether they use it to prepare for future decisions in particular the anticipation of similar future choices increases consumers sensitivity to comparisons with better alternatives and reduces their liking of the chosen option our findings indicate that forward looking consumers selectively test the hypothesis that their current choice can be improved on and as a result disproportionately attend to the unfavorable comparisons and fail to appreciate the value of their current choice

a direct test of the lemons model the market for used pickup trucks of the implications of models of markets with asymmetric information in the seminal paper on markets with asymmetric information george akerlof 1970 pointed out two possible outcomes that may occur where sellers have better information about the quality of products than do buyers one possibility is that bad products will drive out good products if buyers cannot distinguish quality until after the purchase has been made there will be no incentive for sellers to provide good quality products and the average quality in the market will decline in the case of cars an often cited example of this phenomenon owners who discover that they have a lemon will attempt to sell it in the used car market to an unsuspecting buyer the owner of a creampuff will not sell his car since it is indistinguishable from a lemon to buyers and must therefore sell for the price of a car of average quality the effect of quality uncertainty is to reduce the volume of transactions in the used car market below the socially optimal level a second possibility suggested by akerlof is that institutions may develop to counteract the effects of quality uncertainty warranties and brand names can be used to give the buyer some assurance of quality these institutions may prevent good products from being driven from the market but they will

consumer evaluations of multiple versus single price change this article examines how consumer evaluations of multiple price changes differ from the evaluation of a single price change of an equal amount consistent with r thaler s theory about segregation versus integration of gains and losses we find that multiple price decreases are evaluated more favorably than a single price decrease and multiple price increases are evaluated more unfavorably than a single price increase however these effects are moderated by consumer price uncertainty and relative magnitude of the prices being evaluated because price uncertain consumers consider higher ranges of prices acceptable they are less unfavorable to multiple price increases and more favorable to multiple price decreases than certain consumers moreover when the magnitude of one price is very small relative to other prices consumers preference for multiple price decreases relative to a single price decrease is reduced however this effect is not found when there are price increases

coupon value a signal for price in this article the author proposes that consumers use the value of a coupon to estimate price study 1 shows that the higher the percentage discount the higher the perceived price study 2 demon

the formation of expected future price a reference price for forward looking consumers among numerous possible reference prices expected future price is important a consumer s expectation of the future price of a brand plays a crucial role in the decision to buy now or later failure to characterize reference price as a forward looking concept a common practice in the reference pricing literature violates premises of neoclassical economic theory and leads to questionable modeling applications explicit measures of future price expectations were obtained and used to test various models of expectations formation providing insight into the effect of expected future price on consumers responses to price promotions and brand choice decisions

the effect of inflation on the natural rate of output experimental evidence we examine the inflation output relationship in the usa for the period 1955 90 we start by replicating smyth 1992 and subjecting his estimates to a series of diagnostic tests the model is shown to satisfy conditions for valid inference weak exogeneity and policy analysis super exogeneity engle hendry and richard 1983 these robustness checks allow us to study the out of sample consequences of the point estimates for various levels of inflation one central experimental result is that for inflation rates exceeding 4 the natural rate of output is reduced to such an extent that it contributes to a reduction in the growth rate of real gnp that is below historical trend 3 1 in our sample

the effects of inflation on economic growth lessons from latin america this paper investigates the relationship between inflation and long run growth it presents an endogenous growth model that illustrates the channels through which inflation affects growth the model highlights the effects of inflation on the productivity of capital and the rate of capital accumulation the reduction in growth is caused by a diversion of resources away from activities that lead to faster rates of growth toward activities associated with reducing the costs of inflation the negative association between inflation and growth is assessed empirically for a sample group of latin american countries this abstract was borrowed from another version of this item

semiparametric analysis to estimate the deal effect curve abstract the marketing literature suggests several phenomena that may contribute to the nature of the relationship between sales and price discounts these phenomena can produce complex nonlinearities and interactions in the deal effect curve that are best captured with a flexible approach because a fully nonparametric regression model suffers from the curse of dimensionality the authors propose a semiparametric regression model store level sales over time are modeled as a nonparametric function of own and cross item price discounts and a parametric function of other predictors the authors compare the predictive validity of the semiparametric model with that of two parametric benchmark models and obtain superior performance the results for three product categories indicate threshold and saturation effects for both ownand cross item temporary price cuts the authors also find that the nature of the own item curve depends on other items price discounts comparisons with restricted model specification

on investment decisions in the theory of finance some antinomies and inconsistencies abstract in the paper investment decisions in the theory of finance some antinomies and inconsistencies magni eur j operat res 137 2002 206 shows that using the net present value rule for making investment decisions can lead to inconsistencies and antinomies the author claims that the so called equivalent risk tenet of finance whereby an investor needs to compare an investment opportunity with an asset of equivalent risk is impossible to implement in this paper we show that the main thesis of this paper is incorrect and that finance theory when applied correctly can be used to value investment projects by comparing assets of equivalent risk we point out the fallacies in the author s reasoning and provide an alternative and correct methodology for valuing the projects described in the paper

an investigation of individual responses to tensile price claims this article describes the results of two studies investigating the effects of tensile price claims e g save up to 50 on consumers perceptions of offer value information value and price reduction the findings suggest that the use of tensile claims in conjunction with large advertised price reductions may result in decreased perceived offer value and substantial discounting of expected price reductions by the consumer

is low inflation an important condition for high growth factual evidence for the seemingly universal belief that low price inflation is necessary for high gnp growth is curiously lacking maybe even felt to be unnecessary this paper takes what is thought to be all the not very voluminous postwar factual data that are relevant and treats this data in a number of ways to find whether any convincing demonstration of the truth of this belief is possible the paper concludes that it is not c 1993 academic press inc copyright 1993 by oxford university press

reexamining latitude of price acceptability and price thresholds predicting basic consumer reaction to price behavioral pricing research has shown consumers to have lower and upper price thresholds represented by an inverted u shaped price acceptability function we propose another basic reaction to price namely lower price is better represented by a decreasing acceptability function without a lower price threshold a set of variables is hypothesized to predict consumer reaction to price price consciousness price quality relation and product involvement are shown to influence the shape of the price acceptability function a procedure and model to scale price acceptability and obtain acceptability functions are introduced and applied the cumulative results suggest reliable acceptability scales along with evidence for convergent and construct validity

an empirical analysis of latitude of price acceptance in consumer package goods scanner panel data analyses for sweetened and unsweetened drink categories with four brands in each support the presence of a region of price insensitivity around a reference price the analyses also suggest that consumers with higher average reference price have a wider latitude of price acceptance consumers with a higher frequency of purchase i e shorter average interpurchase time interval are found to have a narrower latitude of price acceptance because they are more aware of the range of price distributions finally consumers with a higher average brand loyalty have a wider latitude of price acceptance demonstrating greater tolerance of price fluctuations

the effect of discount frequency and depth on consumer price judgments the intensity of price discounting by retailers and manufacturers raises important questions about consumer price judgments in the extreme discounting can take the form of frequent but shallow discounts or deep but infrequent discounts the research reported here explores the effects of these strategies on consumer estimation of price levels for competing stores and brands in an initial experiment in which subjects made brand choices over time a depth effect was observed that contrasted with the frequency effect found in previous research subsequent experiments identified the conditions under which depth vs frequency characteristics of price data dominate consumers price estimation judgments frequency information is more influential when sets of interstore or interbrand comparative prices exhibit complex and overlapping distributions hence creating processing difficulty in contrast a depth bias occurs when prices have a simpler dichotomous distribution these results place pragmatically meaningful limitations on the influence of frequency information and illustrate the importance of context in determining consumer price judgments in a promotional environment

the effect of credit on spending decisions the role of the credit limit and credibility the objective of the present research is to study consumer decisions to utilize a line of credit the life cycle hypothesis from economics argues that consumers should intertemporally reallocate their incomes over their life stream to maximize lifetime utility one form of intertemporal allocation is to use past income in the form of savings in the future a second form is the use of future income in the present this can only be done if consumers have access to a temporary pool of money that they can draw from and replenish in the future a function performed by consumer credit however our research reinforces prior findings that consumers are unable to correctly value their future incomes and that they lack the cognitive capability to solve the intertemporal optimization problem required by the life cycle hypothesis instead we argue that consumers use information such as the credit limit as a signal of their future earnings potential specifically if consumers have access to large amounts of credit they are likely to infer that their lifetime income will be high and hence their willingness to use credit and their spending will also be high conversely consumers who are granted lower amounts of credit are likely to infer that their lifetime income will be low and hence their spending will be lower however based on research in the area of consumer skepticism and inference making we also argue for a moderating role of the credibility associated with the credit limit specifically we argue that the above effect of credit availability would be particularly strong for consumers who believe that the credit limit credibly signals their future earnings potential i e a naive consumer who has limited experience with consumer credit however as consumers gain experience with credit they start discounting credit availability as a predictor of their future and start questioning the validity of the process used to set the credit limit hence with experience the effect of credit limit on the willingness to use credit should be attenuated we test these predictions in five separate studies in the first experimental study we manipulate credit limit and credibility and pose subjects with a hypothetical purchase opportunity consistent with our prediction credit limit impacted the propensity to spend but only when the credibility was high in the second experimental study we replicate these findings even when subjects were given information about their expected future salaries and also show that the credit limit influences their expectation of future earnings potential in the third study we show that the mere availability and increase of current liquidity cannot explain our findings in the fourth study we conduct a survey of consumers in which we measure a number of demographic characteristics and also ask them for their propensity to spend in a given purchase situation in the fifth study we use the survey of consumer finances scf dataset a triennial survey of u s families that is designed to provide detailed information on the use of financial services spending behaviors and selected demographic characteristics results from both studies 4 and 5 provide further support for our proposed framework credit limits influence spending to a greater extent for consumers with lower credibility younger consumers and less educated consumers across all studies we achieved triangulation by using a variety of approaches surveys and experiments subjects types young students and older consumers nature of predictor variables manipulated and measured dependent measures purchase likelihood credit card balance new charges and methods of analysis anova and regression and consistently found that increasing credit limits on a credit card increases spending especially when the credibility of the limit is high this paper joins a growing body of literature in marketing and behavioral decision theory that goes beyond the traditional domains of inquiry e g product choice effects of marketing mix variables and focuses on consumer decisions relating to the appropriate use of income to finance consumption our framework differs from prior research on the effect of payment mechanisms on spending in two significant ways first we are interested in the effects of the availability of credit on spending and not necessarily in the effect of the transaction format that is associated with each payment mechanism second while prior research has studied the point of purchase and historic i e prepurchase effects of credit the present research is concerned with the availability of credit in the future specifically our framework is invariant to the current and prior usage of credit by the consumer

valuing risky projects option pricing theory and decision analysis in the academic literature and professional practice there are a number of alternative and apparently competing methods for valuing risky projects in this paper we compare and contrast three different approaches risk adjusted discount rate analysis option pricing analysis and decision analysis focusing on the last two we show that in contrast to some of the claims made in the real options literature when both option pricing and decision analysis methods are correctly applied they must give consistent results we also explore ways in which option pricing and decision analysis methods can be profitably integrated in particular we show how option pricing techniques can be used to simplify decision analysis when some risks can be hedged by trading and conversely how decision analysis techniques can be used to extend option pricing techniques to problems with incomplete securities markets

the effect of semantic cues on consumer perceptions of reference price ads this article examines the differential effects of two types of semantic cues 1 cues connoting that an advertised price discount exhibits low consistency over time and 2 cues connoting that an advertised discount is highly distinctive vis a vis competitors results suggest that for manipulations of external reference prices with offering price held constant semantic cues that connote high distinctiveness are more effective in influencing consumers price related evaluations when the external reference price is otherwise implausibly high than are semantic cues that connote low consistency for manipulations of offering prices with external reference price held constant however semantic cues connoting high distinctiveness exert more relative influence on price related cognitions when offering prices are high

correct or incorrect application of capm correct or incorrect decisions with capm abstract this paper focuses on inconsistencies arising from the use of npv and capm for capital budgeting it shows that i capm capital budgeting decision making based on disequilibrium npv is deductively inferred by the capital asset pricing model ii the use of the disequilibrium npv is widespread in finance both as a decision rule and as a valuation tool iii the disequilibrium npv does not guarantee additivity nor consistency with arbitrage pricing so that it is unreliable for valuation iv magni s magni c a 2002 investment decisions in the theory of finance some antinomies and inconsistencies european journal of operational research 137 206 217 magni c a 2007a project valuation and investment decisions capm versus arbitrage applied financial economics letters 3 2 137 140 criticism of the npv criterion refers to the disequilibrium npv and de reyck s de reyck b 2005 on investment decisions in the theory of finance some antinomies and inconsistencies european of operational research 161 499 504 project valuation method on the basis of which magni s criticism to npv is objected leaves decision makers open to arbitrage losses and incorrect decisions

reference prices and deception in newspaper advertising consumers were exposed to newspaper advertisements for four products and one of five different price representations regular price alone sale price alone regular price with manufacturer s suggested list price mslp sale price with regular price or sale price with mslp perceptions of the ordinary prices of the products were not affected by the presence or type of reference price but the subjects did have lower estimates of ordinary prices in the sale context the accuracy of consumer perceptions of ordinary prices was not related to the recency of subject shopping experience for the products as measured in the study

consumer perceptions of comparative price advertisements the authors analyze the issue of comparative price advertising from a behavioral perspective because public policy recognizes that comparative pricing may lead to consumer misperceptions the auth

anticipated inflation and the capital stock in a cash in advance economy abstract an economy is constructed in which the steady state capital stock is inversely related to the rate of inflation as a result that is directly opposite the usual conclusion

an experimental examination of the economics of information this article presents an experimental test of propositions that come from stigler s classic economics of information theory it reviews previous empirical evidence for the propositions and discusses the mixed support provided for the theory it also discusses a major assumption of the theory and presents hypotheses that suggest that the propositions are not as universal as has been thought the results indicate that buyers with more certain beliefs about retailer price images search less and are less responsive to changes in the costs and benefits of search than buyers with less certain beliefs finally the article discusses the implications of the results for both economics and marketing

an empirical analysis of internal and external reference prices using scanner data single source yogurt data are used to examine whether both internal and external reference prices affect purchase decisions internal reference prices are memory resident prices based on actual fair or other price concepts external reference prices are observed stimuli such as regular prices that stores may display along with a sale price for comparability discrete choice models with variables representing the two types of reference prices are estimated and both types of variables are found to have significant effects on purchase probabilities this suggests that consumers may use multiple reference points in evaluating price in purchase decisions in addition a model using an indicator of a sale price discount explains purchase probabilities as well as one that models the actual discount which suggests that consumers may be reacting to the indication of savings rather than to the amount of the discount

effects of competitive context and of additional information on price sensitivity previous marketing research on the effects of price has tended to ignore the role of such moderating variables as competitive context and the availability of additional information the authors presented subjects with forced choice decisions in several product categories using a multinomial logit formulation to measure price sensitivity they find relatively lower price sensitivity 1 when a brand is placed at the upper price quality boundary of a choice set rather than in the middle 2 when only brand names are provided as opposed to only quality ratings and 3 when quality information is added to available brand name information they discuss the theoretical and managerial implications of these findings

the effect of plausible and exaggerated reference prices on consumer perceptions and price search this article examines whether advertisers regular price claims affect consumer perceptions and price search behavior experiments involving simulated shopping via personal computers indicate that compared to an ad with no reference price an ad with a plausible reference price raised subjects estimates of the advertiser s regular price and the perceived offer value an exaggerated reference price had generally the same positive effects on perception as a plausible reference price even for the more skeptical subjects further when subjects were presented with an advertised sale price above the lowest expected price the exaggerated reference price increased the percentage of subjects who purchased the product from the advertiser without checking other stores prices

sweet lemons illusory quality self deceivers advertising and price the author s study suggests that competition can lead to low quality advertisers competing against and gaining market shares from lower priced high quality non advertisers evidence in support of

the influence of prior beliefs frequency cues and magnitude cues on consumers perceptions of comparative price data a widespread practice in grocery store advertising is to compare the advertised store s prices to a competitor s prices on multiple items an important but largely unexplored issue is how this information is processed and used in conjunction with prior beliefs to influence price perceptions in our initial studies we manipulated prior beliefs and two data based cues frequency of price advantage and magnitude of price advantage to determine their relative influence on consumer price perceptions results indicate that prior beliefs affected price perceptions but that the frequency cue exerted a dominating influence several follow up studies demonstrate the robustness of this phenomenon across a variety of presentational and instructional conditions

chapter 11 pricing models in marketing publisher summary this chapter brings together a set of diverse efforts in the recent literature on the modeling of price decisions and related questions in marketing there has been an impressive growth in the array of topics investigated in the literature various trends in the development of pricing models are evident from the foregoing review first one trend has been to develop theoretical models to describe observed pricing strategies in the marketplace and to derive conditions under which certain strategies are optimal this trend is clearly evident when one considers the area of dynamic pricing models another trend is an attempt to develop pricing models in which certain aspects of consumer behavior e g asymmetric response to price increases versus price decreases are incorporated this development is quite recent and does offer a large potential a third dominant direction is the use of game theoretic models for developing equilibrium pricing strategies

effects of seller supplied prices on buyers product evaluations reference prices in an internet auction context a field experiment investigated the impact of two external reference points under the seller s control on the final price of an auction when an item s seller specified a high external reference price a reserve price the final bid was greater than when the seller specified a low external reference price a minimum bid when the seller provided both high and low reference prices the reserve influenced the final bid more the low reference price led to a lower outcome compared to when the seller did not communicate any reference price the number of bidders influenced outcomes in the absence of seller supplied reference prices

inflation and the growth rate in the united states natural output the continuing and rising rate of inflation in the united states is of concern because inflation is not harmless inflation causes economic agents to waste time and resources reducing the growth rate of productivity and the natural level of output the size of this effect is estimated using in which an inflation variable natural growth rate is embedded in an expectations augmented phillis curve or lucas surprise function the effect is large for each one percentage point decrease in the annual inflation rate the annual growth rate in productivity is reduced by 0 223 percentage points thus a reduction in inflatin from 6 to zero would increase the natural rate of output growth by one and one third percentage points per year given the unwillingness of politicians and perhaps the chairman of the federal reserve system to attempt aggressively to lower the rate of inflation there is considerable merit in an institutional reform that directs the federal reserve to reduce inflation to zero and maintain p

anchoring effects on consumers willingness to pay and willingness to accept we examine the susceptibility of consumers willingness to pay wtp and willingness to accept wta judgments to influence by arbitrary anchors the results of four studies suggest that although circumstantial differences between buying and selling decisions can lead to systematic differences in susceptibility to anchoring effects the principles governing the impact of anchoring on wtp and wta judgments are essentially the same in particular robust anchoring effects are observed when the anchor relates to the focal source of uncertainty further wtp and wta judgments are most susceptible to anchoring and endowment effects under uncertainty about the desire to trade the implications of this research for our understanding of anchoring and endowment effects are discussed

on inflation and output with costly price changes a simple unifying result this paper determines the real effects of credible disinflation when price setting is staggered the results are surprising a fairly quick disinflation causes a boom this finding suggests that nominal price rigidity alone does not explain why disinflation is costly in actual economies this abstract was borrowed from another version of this item

how buyers perceive savings in a bundle price an examination of a bundle s transaction value although bundling the selling of two or more products and or services at a single price has a history of economic research marketing oriented investigations have appeared only recently this pap

distortion of price discount perceptions the right digit effect we use four experiments to examine consumers processing of comparative regular and sale price information in advertisements consistent with our hypothesized right digit effect we find that when consumers view regular and sale prices with identical left digits they perceive larger price discounts when the right digits are small i e less than 5 than when they are large i e greater than 5 as a result they may attribute greater value and increased purchase likelihood to higher priced lower discounted items we examine alternate processing explanations for this right digit effect as well as the moderating impact of price presentation format

conscious and nonconscious comparisons with price anchors effects on willingness to pay for related and unrelated products abstract exposing consumers to extreme prices can influence the price they are willing to pay for both related and unrelated products drawing on previous theories of anchoring and adjustment and selective accessibility of judgment relevant knowledge the authors provide an account of both asymmetries in the impact of price anchors across product categories and contingencies in the occurrence of these asymmetries four studies show the deliberate consideration of price anchors that can play a key role in whether the effect of the anchors will generalize across product categories specifically an explicit comparison of a product to a price anchor increases the accessibility of features that represent a product available at this price in turn these thoughts influence the price that consumers are willing to pay for these products in the absence of this deliberation however anchors influence both related and unrelated products provided no other cognitive activity occurs in the interim

the effects of an undisclosed regular price and a positive leadtime in a presale mechanism abstract a presale program is popular with manufacturers who wish to reduce the risk posed by uncertain demands we introduce a new price mechanism in which the manufacturer during the presale period does not disclose the exact regular price in the sale period although it is guaranteed to customers to be higher than the presale price as positive leadtime is much overlooked in presale models we analyze the rationality of including one the numerical results in this paper show that both the specific price mechanism and the positive leadtime have significant effects on the manufacturer s policy production quantity presale price regular price the expected profit and customer behaviors the optimal discount rate should be greater than 50 percent this conclusion is consistent with existing results of surveys on saturation points the manufacturer can take advantage of the latest information on demand gathered in the presale period to update their policy and increase their expected profit

investment decisions in the theory of finance some antinomies and inconsistencies abstract the net present value rule is a pillar of modern finance theory as known it is a capital budgeting rule finance theory prescribes the investor to compare the opportunity in hand with an asset of equivalent risk i e to discount cash flows with a risk adjusted rate of return this paper aims at showing that inconsistencies and antinomies arise when applying the above mentioned rule further it turns out that it is actually impossible to compare alternatives equivalent in risk and any decision maker cannot prevent herself to violate the above tenet

a consumer perspective on price matching refund policies effect on price perceptions and search behavior although price matching refund policies are common in many retail environments the impact of such policies on consumers has largely been ignored this article reports the results of three studies that examine price matching policies from a consumer perspective study 1 shows that consumers perceive price matching policies as signals of low store prices and that the presence of a refund increases the likelihood of discontinuing price search contrary to the predictions based on signaling theory in information economics studies 2 and 3 show that when search costs are low the number of stores searched increases in the presence versus absence of a price matching policy when search costs are high consumers appear to accept the price matching signal at face value and search less in the presence of a refund the article concludes by discussing the theoretical implications of the findings and suggesting directions for future research

reframing the discount as a comparison against the sale price does it make the discount more attractive abstractsales induced through price promotions depend heavily on discount depth so firms create mechanisms to influence perceptions of discount depth typically consumers compute discount depth as the difference between the sale price and the original price with this difference compared against the original price but thus far no research has examined the effect of reframing this difference by comparing the discount depth against the sale price multiple studies including a field study across four grocery stores show that framing the discount depth by comparing it against the sale price increases consumers discount depth perceptions and thus increases purchase intentions as evidence of the underlying process the authors identify boundary conditions related to both individual differences numeracy and managerially relevant factors discount depth size in addition to contributing to research on price promotions behavioral pricing and numeric processing the article offers implications for both