Price variation antagonism and firm pricing policies
AbstractSurvey evidence suggests firms do not use pricing policies that vary prices in response to demand changes because they fear that such practices would antagonize consumers. We investigate this hypothesis using a dataset from a firm that has experimented with different pricing schemes. Each scheme is characterized by how much prices respond to demand variations. We find evidence that is consistent with the hypothesis that consumers take advantage of the opportunities offered by price changes and inconsistent with the hypothesis that consumers are antagonized by price changes caused by demand shocks.
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Bibliographic InfoArticle provided by Elsevier in its journal Journal of Economic Behavior & Organization.
Volume (Year): 75 (2010)
Issue (Month): 2 (August)
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Web page: http://www.elsevier.com/locate/jebo
Consumer demand Consumer antagonism Price variation Responsive pricing Fairness;
Other versions of this item:
- Pascal Courty & Mario Pagliero, 2006. "Price Variation Antagonism and Firm Pricing Policies," Economics Working Papers ECO2006/27, European University Institute.
- Courty, Pascal & Pagliero, Mario, 2007. "Price Variation Antagonism and Firm Pricing Policies," CEPR Discussion Papers 6663, C.E.P.R. Discussion Papers.
- Pascal Courty & Mario Pagliero, 2008. "Price Variation Antagonism and Firm Pricing Policies," Economics Working Papers ECO2008/02, European University Institute.
- D01 - Microeconomics - - General - - - Microeconomic Behavior: Underlying Principles
- D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
- L86 - Industrial Organization - - Industry Studies: Services - - - Information and Internet Services; Computer Software
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