Pricing with bargain hunting consumers

• 成果类型: Article
• 署名作者: Gentry, Matthew; Pesendorfer, Martin
• 署名单位: State University System of Florida; Florida State University; University of London; London School Economics & Political Science
• 刊物名称: GAMES AND ECONOMIC BEHAVIOR
• ISSN/ISSBN: 0899-8256
• DOI: 10.1016/j.geb.2021.06.011
• 发表日期: 2021
• 页码: 549-569
• 关键词: Bargain hunting; Reference effects; pricing

摘要

A single-product retailer faces bargain hunting consumers whose willingness to pay incorporates sensations of gain and loss driven by differences between the observed price and prices they rationally expect in the spirit of Koszegi and Rabin (2006). We examine the Bayesian Nash equilibrium (non-commitment) pricing solution in which (i) the retailer maximizes profit given consumers' beliefs and (ii) consumers' beliefs are consistent with the retailer's choice. We show two novel results: First, a pure-strategy, uniform-price, equilibrium does not exist when consumers are bargain hunters who value gains more than losses. Second, in this case there exists a mixed strategy equilibrium and all mixed strategy equilibria involve the same retailer profit. The equilibrium retailer profit is (weakly) lower than in the absence of reference effects. (C) 2021 Elsevier Inc. All rights reserved.