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Incorporating Behavioral Anomalies in Strategic Models

Author

Listed:
  • Chakravarthi Narasimhan
  • Chuan He
  • Eric Anderson
  • Lyle Brenner
  • Preyas Desai
  • Dmitri Kuksov
  • Paul Messinger
  • Sridhar Moorthy
  • Joseph Nunes
  • Yuval Rottenstreich
  • Richard Staelin
  • George Wu
  • Z. Zhang

Abstract

Behavioral decision researchers have documented a number of anomalies that seem to run counter to established theories of consumer behavior from microeconomics that are often at the core of analytical models in marketing. A natural question therefore is how equilibrium behavior and strategies would change if models were to incorporate these anomalies in a consistent way. In this paper we identify several important and generalizable anomalies that modelers may want to incorporate in their models. We briefly discuss each phenomenon, identify a key unresolved issue and outline a research agenda to be pursued. Copyright Springer Science + Business Media, Inc. 2005

Suggested Citation

  • Chakravarthi Narasimhan & Chuan He & Eric Anderson & Lyle Brenner & Preyas Desai & Dmitri Kuksov & Paul Messinger & Sridhar Moorthy & Joseph Nunes & Yuval Rottenstreich & Richard Staelin & George Wu &, 2005. "Incorporating Behavioral Anomalies in Strategic Models," Marketing Letters, Springer, vol. 16(3), pages 361-373, December.
    • Handle: RePEc:kap:mktlet:v:16:y:2005:i:3:p:361-373
    DOI: 10.1007/s11002-005-5898-9
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    3. James Andreoni & Tymofiy Mylovanov, 2012. "Diverging Opinions," American Economic Journal: Microeconomics, American Economic Association, vol. 4(1), pages 209-232, February.
    4. Arnaud De Bruyn & Gary E. Bolton, 2008. "Estimating the Influence of Fairness on Bargaining Behavior," Management Science, INFORMS, vol. 54(10), pages 1774-1791, October.
    5. Richard Staelin, 2008. "Commentary—An Industry Equilibrium Analysis of Downstream Vertical Integration: Twenty-Five Years Later," Marketing Science, INFORMS, vol. 27(1), pages 111-114, 01-02.
    6. Ruzzier, Christian A. & Woo, Marcelo D., 2023. "Discrimination with inaccurate beliefs and confirmation bias," Journal of Economic Behavior & Organization, Elsevier, vol. 210(C), pages 379-390.
    7. Özalp Özer & Yanchong Zheng, 2016. "Markdown or Everyday Low Price? The Role of Behavioral Motives," Management Science, INFORMS, vol. 62(2), pages 326-346, February.
    8. Kiełczewski Dariusz & Matel Anna & Poskrobko Tomasz, 2016. "Project Management in Behavioural Perspective – Cognitive Biases in the Formulation of the Aim of the Project," Engineering Management in Production and Services, Sciendo, vol. 8(3), pages 70-78, September.
    9. Yuxin Chen & Özge Turut, 2013. "Context-Dependent Preferences and Innovation Strategy," Management Science, INFORMS, vol. 59(12), pages 2747-2765, December.
    10. Chakravarthi Narasimhan & Özge Turut, 2013. "Differentiate or Imitate? The Role of Context-Dependent Preferences," Marketing Science, INFORMS, vol. 32(3), pages 393-410, May.
    11. Ningyuan Chen & Javad Nasiry, 2020. "Does Loss Aversion Preclude Price Variation?," Manufacturing & Service Operations Management, INFORMS, vol. 22(2), pages 383-395, March.
    12. A. Ye(scedilla)im Orhun, 2009. "Optimal Product Line Design When Consumers Exhibit Choice Set-Dependent Preferences," Marketing Science, INFORMS, vol. 28(5), pages 868-886, 09-10.

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