Consumer Search And Dynamic Price Dispersion
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Consumer Search And Dynamic Price Dispersion
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Author : Ambarish Chandra
language : en
Publisher:
Release Date : 2011
Consumer Search And Dynamic Price Dispersion written by Ambarish Chandra and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2011 with categories.
This paper studies the role of imperfect information in explaining price dispersion. We use a new panel dataset on the U.S. retail gasoline industry, and propose a new test of temporal price dispersion to establish the importance of consumer search. We show that price rankings vary significantly over time; however, they are more stable among stations at the same street intersection. We establish the equilibrium relationships between price dispersion and key variables from consumer search models. Price dispersion increases with the number of firms in the market, decreases with the production cost and increases with search costs.
Behavioral Consequences Of Dynamic Pricing
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Author : David Prakash
language : en
Publisher: BoD – Books on Demand
Release Date : 2022-07-28
Behavioral Consequences Of Dynamic Pricing written by David Prakash and has been published by BoD – Books on Demand this book supported file pdf, txt, epub, kindle and other format this book has been release on 2022-07-28 with Business & Economics categories.
Digital technologies are driving the application of dynamic pricing. Today, this pricing strategy is used not only for perishable products such as flights or hotel rooms, but for almost any product or service category. With dynamic pricing, retailers frequently adjust their prices over time to respond to factors such as demand, their supply and that of competitors, or the time of sale. Additionally, dynamic pricing allows retailers to take advantage of a large share of consumers' willingness to pay while avoiding losses from unsold products. Ultimately, this can lead to an increase in revenue and profit. However, the application of dynamic pricing comes with great challenges. In addition to the technological implementation, companies have to take into account that dynamic pricing can cause complex and unintended behavioral consequences on the consumer side. The key objective of this dissertation is to provide a deeper understanding of the impact of dynamic pricing on consumer behavior. To this end, this dissertation presents insights from four perspectives. First, how reference prices as a critical component in purchase decisions are operationalized. Second, how customers search for products priced dynamically, differentiated by business and private customers, as well as by different devices used for the search. Third, whether and how dynamic pricing influences the impact of internal reference prices on purchase decisions. Finally, this dissertation demonstrates that consumers perceive price changes as personalized in different purchase contexts, leading to reduced perceptions of fairness and undesirable behavioral consequences.
Consumer Search Price Dispersion And International Relative Price Fluctuations
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Author : George Alessandria
language : en
Publisher:
Release Date : 2009
Consumer Search Price Dispersion And International Relative Price Fluctuations written by George Alessandria and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2009 with categories.
This article develops a model of consumer search consistent with the evidence of substantial price dispersion and time spent shopping within countries to study international deviations from the law of one price (LOP) and relative price fluctuations. Search frictions lead firms to price discriminate across markets based on the opportunity cost of search, which depends on the local wage. With productivity and taste shocks estimated from the data, deviations from the LOP are as volatile and persistent as in the data. Fluctuations in relative wages, real exchange rates, and the terms of trade are also consistent with the data.
Price Dispersion And Consumers Search Under Imperfect Information
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Author : Chiaen John Wu
language : en
Publisher:
Release Date : 1992
Price Dispersion And Consumers Search Under Imperfect Information written by Chiaen John Wu and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1992 with Consumers' preferences categories.
Price Dispersion And Retailer Behavior
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Author : Ying Zhao
language : en
Publisher:
Release Date : 2001
Price Dispersion And Retailer Behavior written by Ying Zhao and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2001 with categories.
Consumer Search Price Dispersions And International Relative Price Volatility
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Author : George Alessandria
language : en
Publisher:
Release Date : 2005
Consumer Search Price Dispersions And International Relative Price Volatility written by George Alessandria and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2005 with Consumers categories.
This paper develops a model of consumer search consistent with the evidence of substantial price dispersion within countries. This model is used to study international relative price fluctuations. Consumer search frictions permit firms to price discriminate across markets based on the local wage of consumers. With price dispersion, the market price of a good does not measure its resource cost. This breaks the tight link between relative quantities and relative prices implied by most models. The authors show that volatile and persistent fluctuations in relative wages lead to volatile and persistent fluctuations in relative prices at the disaggregate level. These deviations from the law of one price substantially increase international relative price volatility. With productivity and taste shocks, the model generates international business cycles that closely match the data.
Consumer Search Price Dispersion And International Relative Price Volatility
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Author : George Alessandria
language : en
Publisher:
Release Date : 2005
Consumer Search Price Dispersion And International Relative Price Volatility written by George Alessandria and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2005 with categories.
The Effects Of General Inflation And Idiosyncratic Cost Shocks On Within Commodity Price Dispersion
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Author : Joe Beaulieu
language : en
Publisher:
Release Date : 1994
The Effects Of General Inflation And Idiosyncratic Cost Shocks On Within Commodity Price Dispersion written by Joe Beaulieu and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 1994 with Inflation (Finance) categories.
Price Dispersion And Informational Frictions
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Author : Pierre Dubois
language : en
Publisher:
Release Date : 2015
Price Dispersion And Informational Frictions written by Pierre Dubois and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2015 with Consumer behavior categories.
Traditional demand models assume that consumers are perfectly informed about product characteristics, including price. However, this assumption may be too strong. Unannounced sales are a common supermarket practice. As we show, retailers frequently change position in the price rankings, thus making it unlikely that consumers are aware of all deals offered in each period. Further empirical evidence on consumer behavior is also consistent with a model with price information frictions. We develop such a model for horizontally differentiated products and structurally estimate the search cost distribution. The results show that in equilibrium, consumers observe a very limited number of prices before making a purchase decision, which implies that imperfect information is indeed important and that local market power is potentially high. We also show that a full information demand model yields severely biased price elasticities.
Consumer Search Price Dispersion And Asymmetric Pricing
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Author : Mariano Emilio Tappata
language : en
Publisher:
Release Date : 2006
Consumer Search Price Dispersion And Asymmetric Pricing written by Mariano Emilio Tappata and has been published by this book supported file pdf, txt, epub, kindle and other format this book has been release on 2006 with Consumer behavior categories.
In Chapter I, I explore the theoretical implications of consumer search on price dynamics. Previous empirical work established that in most markets "prices rise like rockets but fall like feathers." I show that a model with competitive firms and rational partially-informed consumers can generate such asymmetric response to costs by firms. In contrast to public opinion and past work, collusion is not necessary to explain such stylized fact.