The Strength of Weak Commitments: A Theory of Price Preannouncements

• 成果类型: Article; Early Access
• 署名作者: Li, Xi; Xiong, Yan
• 署名单位: University of Hong Kong
• 刊物名称: MANAGEMENT SCIENCE
• ISSN/ISSBN: 0025-1909
• DOI: 10.1287/mnsc.2023.02020
• 发表日期: 2025
• 关键词: price preannouncement; COMMITMENT; pricing; distribution channel

摘要

Manufacturers often preannounce reference prices for products that have not yet been produced or even developed. These prices are rarely binding, meaning that the manufacturers can make price adjustments in the future, possibly at a cost. In this paper, we argue that price preannouncements can serve as a weak price commitment that, we find, helps the manufacturers secure better deals from their suppliers, thereby lowering their procurement costs and improving their profit. Surprisingly, even an extremely weak price commitment can substantially improve a manufacturer's profit. On the other hand, when the price commitment is credible enough, the manufacturer forgoes the price preannouncement. Collectively, these results underscore the strategic effects that price preannouncements can have on firms' marketing decisions.