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Behavioral Aspects of Pricing

Lowe, Ben and Lowe, Julian and Lynch, David (2012) Behavioral Aspects of Pricing. In: Hinterhuber, Andreas and Liozu, Stephan, eds. Innovation in Pricing: Contemporary Theories and Best Practices. Routledge. ISBN 978-0-415-52164-2. (KAR id:46700)

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Abstract

Buyers sometimes exhibit seemingly “irrational” behavior with respect to prices and use socially embedded heuristics to simplify their purchase decisions. In some cases small changes in prices can lead to much larger than anticipated changes in sales and profitability. Sellers need to understand the heuristics consumers use, the situations in which they emerge, and recognize how they can respond in markets where information and knowledge of product attributes and competitive prices is increasingly available via the Internet. This chapter explores consumers’ behavioral reactions to price through a review of contemporary literature in the field of pricing. The chapter delineates the nature and scope of these effects based upon a critical review of the most up-to-date empirical research in the field, and concludes by providing implications for innovation in pricing, and guidance for managers to reduce the disconnect between themselves and consumers.

Item Type: Book section
Uncontrolled keywords: Heuristics, willingness–to pay (WTP), value, reference price, price knowledge, perceived value
Subjects: H Social Sciences > HF Commerce
Divisions: Divisions > Kent Business School - Division > Kent Business School (do not use)
Depositing User: Benjamin Lowe
Date Deposited: 14 Jan 2015 20:20 UTC
Last Modified: 16 Feb 2021 13:22 UTC
Resource URI: https://kar.kent.ac.uk/id/eprint/46700 (The current URI for this page, for reference purposes)
Lowe, Ben: https://orcid.org/0000-0002-5041-600X
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