The Threshold-Crossing Effect: Just-Below Pricing Discourages Consumers to Upgrade

2021 ◽  
Author(s):  
Junha Kim ◽  
Selin A Malkoc ◽  
Joseph K Goodman
Keyword(s):  
Boundary Conditions ◽  
Field Study ◽  
Empirical Evidence ◽  
Optimal Strategy ◽  
Conventional Wisdom ◽  
Sequential Choice ◽  
Hotel Room ◽  
Threshold Crossing ◽  
Round Number ◽  
Price Perceptions

Abstract Managers often set prices just-below a round number (e.g., $39) – a strategy that lowers price perceptions and increases sales. The authors question this conventional wisdom in a common consumer context: upgrade decisions (e.g., whether to upgrade a car or hotel room). Seven studies—including one field study—provide empirical evidence for a threshold-crossing effect. When a base product is priced at or just-above a threshold, consumers are more likely to upgrade and spend more money (studies 1–3) because they perceive the upgrade option as less expensive (study 4), and they place less weight on price (study 5). Testing theoretically motivated and managerially relevant boundary conditions, studies find that the threshold-crossing effect is mitigated under sequential choice (study 6) and when an upgrade price crosses an upper threshold (study 7). These studies demonstrate that a small increase in price on a base product can decrease price perceptions of an upgrade option and, thus, increase consumers’ likelihood to upgrade. It suggests that just-below pricing, while sometimes advantageous at first, may not always be an optimal strategy for managers trying to encourage consumers to ultimately choose an upgrade option.

scholarly journals Multi-time state mean-variance model in continuous time

2021 ◽  
Vol 27 ◽  
pp. 92
Author(s):  
Shuzhen Yang
Keyword(s):  
Boundary Conditions ◽  
Continuous Time ◽  
Optimal Strategy ◽  
Investment Portfolio ◽  
Variance Model ◽  
Investment Plan ◽  
Terminal Time ◽  
Variance Risk ◽  
Maximum Drawdown ◽  
Mean Variance

The objective of the continuous time mean-variance model is to minimize the variance (risk) of an investment portfolio with a given mean at the terminal time. However, the investor can stop the investment plan at any time before the terminal time. To solve this problem, we consider to minimize the variances of the investment portfolio in the multi-time state. The advantage of this multi-time state mean-variance model is the minimization of the risk of the investment portfolio within the investment period. To obtain the optimal strategy of the model, we introduce a sequence of Riccati equations, which are connected by jump boundary conditions. In addition, we establish the relationships between the means and variances in the multi-time state mean-variance model. Furthermore, we use an example to verify that the variances of the multi-time state can affect the average of Maximum-Drawdown of the investment portfolio.

Gritty Leaders Promoting Employees’ Thriving at Work

2020 ◽  
pp. 014920632090476 ◽  
Author(s):  
Arménio Rego ◽  
Flávia Cavazotte ◽  
Miguel Pina e Cunha ◽  
Camilo Valverde ◽  
Marcel Meyer ◽  
...  
Keyword(s):  
United States ◽  
Boundary Condition ◽  
Boundary Conditions ◽  
Field Study ◽  
Wave Field ◽  
The United States ◽  
Leader Support ◽  
Indirect Association ◽  
Work First ◽  
Thriving At Work

Four studies (a vignette-based experiment conducted in Portugal and Brazil, a two-wave multisource field study in Portugal, a three-wave field study in the United States, and a multisource field study in Portugal), in which conscientiousness, a “rival” of grit, was controlled for, provide theoretical and empirical evidence for a model testing what (e.g., grit in leaders), why (e.g., employee self-attributed grit), and when (e.g., leader support) grit supports thriving at work. First, gritty employees are more likely to thrive. Second, conveyed leader grit (i.e., grit as perceived by employees) predicts employee grit. Third, conveyed leader grit and leader self-attributed grit are conceptually different, and although the two relate positively with employee self-attributed grit, the former is a better predictor of employee self-attributed grit. Fourth, leader support operates as a boundary condition, in that the indirect association of conveyed leader grit with employee thriving is stronger when the leader is perceived as supportive. Our research also indicates that the concept of grit is more textured than habitually considered and that more attention must be paid to the boundary conditions of its development and impact.

Forgetting the Last Big War

2011 ◽  
Vol 56 (2) ◽  
pp. 204-222 ◽  
Author(s):  
Susan Keith
Keyword(s):  
Empirical Evidence ◽  
News Media ◽  
Online News ◽  
Conventional Wisdom ◽  
60Th Anniversary ◽  
Collective Memories ◽  
The Past ◽  
65Th Anniversary ◽  
Visual Coverage

This article reports the results of a study of coverage of the 65th anniversary of the liberation of Paris published in French newspapers, newsmagazines, and online news media in 2009. Building on a previous study of images of the liberation in Parisian newspapers at the 60th anniversary in 2004, it provides empirical evidence for the conventional wisdom that less anniversary journalism is produced in non-decennial than decennial anniversaries. In addition, the article shows that visual coverage of the 65th anniversary of the liberation was even more reductive than coverage of the 60th, concentrating almost exclusively on images of French joy and authority and forgoing more problematic representations of German occupiers, French collaborationists, and U.S. troops. Finally, the article argues that this sparse and reductive view of the liberation of Paris has the potential to affect collective memories of the event as it recedes into the past and the number of living French citizens who remember it firsthand declines.

scholarly journals Understanding Opportunities in Social Entrepreneurship: A Critical Realist Abstraction

2019 ◽  
Vol 44 (5) ◽  
pp. 1032-1056 ◽  
Author(s):  
Xiaoti Hu ◽  
Susan Marlow ◽  
Angelika Zimmermann ◽  
Lee Martin ◽  
Regina Frank
Keyword(s):  
Boundary Conditions ◽  
Empirical Evidence ◽  
Social Entrepreneurship ◽  
Belief System ◽  
Dynamic Structure ◽  
Structural Aspect ◽  
Critical Realist ◽  
Shaping Process ◽  
Path Dependent ◽  
Realist Perspective

This article extends social entrepreneurship (SE) research by drawing upon a critical realist perspective to analyse dynamic structure/agency relations in SE opportunity emergence, illustrated by empirical evidence. Our findings demonstrate an agential aspect (opportunity actualisation following a path-dependent seeding-growing-shaping process) and a structural aspect (institutional, cognitive and embedded structures necessary for SE opportunity emergence) related to SE opportunities. These structures provide three boundary conditions for SE agency: institutional discrimination, an SE belief system and social feasibility. Within this article, we develop a novel theoretical framework to analyse SE opportunities plus, an applicable tool to advance related empirical research.

How Gender Conditions the Way Citizens Evaluate and Engage with Their Representatives

2017 ◽  
Vol 71 (1) ◽  
pp. 46-58 ◽  
Author(s):  
Mia Costa ◽  
Brian F. Schaffner
Keyword(s):  
Empirical Evidence ◽  
Gender Stereotypes ◽  
Strong Evidence ◽  
Political Engagement ◽  
Conventional Wisdom ◽  
Congressional Election ◽  
Panel Survey ◽  
Election Study ◽  
Study Panel ◽  
Rate Female

Scholars argue that women’s presence in politics enhances symbolic representation, such as positive evaluations of one’s representative and increased political engagement. However, there is little empirical evidence of these symbolic benefits from descriptive representation. With data from the Cooperative Congressional Election Study panel survey, we examine how a change in the gender of a representative affects individuals’ perceptions of that representative and likelihood to contact them. In general, we find that women express more positive evaluations of female representatives than male representatives, yet they are also less likely to contact female representatives. By contrast, the effect of an elected official’s gender does not significantly affect how men evaluate or engage with that official. However, we also show that partisanship conditions these effects, perhaps due to the fact that gender stereotypes operate differently for Democrats than Republicans. For example, women rate female Republican legislators more positively than they do male Republican legislators, but neither women nor men rate Democratic legislators differently based on their gender. The findings provide strong evidence that gender matters when it comes to representation, but contrary to some conventional wisdom, female elected officials may actually enjoy some advantages in terms of their standing among constituents.

New Product Preannouncement: Phantom Products and the Osborne Effect

2019 ◽  
Vol 65 (8) ◽  
pp. 3776-3799 ◽  
Author(s):  
Ram Rao ◽  
Ozge Turut
Keyword(s):  
Reference Point ◽  
Consumer Choice ◽  
Optimal Strategy ◽  
Consumer Preferences ◽  
Experimental Studies ◽  
New Product ◽  
Conventional Wisdom ◽  
Significant Lowering ◽  
Quality Product ◽  
Current Product

The mere preannouncement of a new product can affect consumer choice, thus complicating preannouncement strategy. This is because a preannounced product that is unavailable immediately can still be one of the alternatives in a consumer’s mind at the time of choice. Such unavailable products, also known as phantom products, influence the reference point that consumers compare alternatives to when making a choice, as has been widely demonstrated in experimental studies. Thus, in addition to encouraging consumers to postpone purchase in favor of a future product, preannouncement also changes their preference for the currently available products when consumers do not prefer to postpone. In this paper we explore preannouncement strategy by analyzing a model that incorporates the effect of new product preannouncement (NPP) on consumer preferences and compare the results with a benchmark case in which consumer preferences across the existing products are not influenced by preannouncement. We find that when we take into account the effect of NPP on consumer preferences across the existing products, although postponement of purchase by some consumers remains beneficial, the preference for the current product offering with a lower quality can suffer so much that the significant lowering of current profits is not offset by future gains. Thus, preannouncement may no longer be the optimal strategy for the firm with a lower-quality product, which in turn explains the “Osborne effect.” Our results also challenge the conventional wisdom in new product preannouncement literature. This paper was accepted by Juanjuan Zhang, marketing.

Causal Beliefs and Empirical Evidence

2011 ◽  
Vol 58 (4) ◽  
pp. 324-332 ◽  
Author(s):  
Stephanie M. Müller ◽  
Rocio Garcia-Retamero ◽  
Edward Cokely ◽  
Antonio Maldonado
Keyword(s):  
Decision Making ◽  
Boundary Conditions ◽  
Empirical Evidence ◽  
Strong Influence ◽  
Correct Diagnosis ◽  
Causal Beliefs ◽  
Risky Decision ◽  
Causal Judgments ◽  
Medical Diagnostic ◽  
The Impact

Causal beliefs often facilitate decision making. However, strong causal beliefs can also lead to neglect of relevant empirical evidence causing errors in risky decision making (e.g., medical, financial). We investigated the impact of pre-training and post-experience on the evaluation of empirical evidence in a two-alternative medical diagnostic task. Participants actively searched for information about two patients on the basis of four available cues. The first experiment indicated that pre-training can weaken the strong influence of causal beliefs reducing neglect of empirical evidence. The second experiment demonstrated that increasing amounts of empirical evidence can improve people’s ability to decide in favor of a correct diagnosis. The current research converges with other recent work to clarify key mechanisms and boundary conditions shaping the influence of causal beliefs and empirical evidence in decisions and causal judgments.

Why Are International Visitors More Satisfied with the Tourism Experience? The Role of Hedonic Value, Escapism, and Psychic Distance

2020 ◽  
pp. 004728752096117
Author(s):  
Frédéric Ponsignon ◽  
Renaud Lunardo ◽  
Mohamed Michrafy
Keyword(s):  
Field Study ◽  
Empirical Evidence ◽  
Empirical Studies ◽  
Psychic Distance ◽  
Online Experiment ◽  
Hedonic Value ◽  
Tourism Experience ◽  
International Visitors

Previous studies have consistently observed that international visitors are more satisfied with the tourism experience than their domestic counterparts. To date, however, no study has provided empirical evidence of the mechanism that could explain this phenomenon. Building on the experiential paradigm, we conducted two empirical studies (a field study and an online experiment) showing that the reason foreign (vs. domestic) visitors exhibit higher levels of satisfaction lies in the greater hedonic value that these tourists derive from their experience. Moreover, the greater hedonic value observed among international foreign visitors is due to the deeper feeling of escapism they experience by traveling abroad. We also demonstrate that this effect is explained by the concept of psychic distance, whereby going abroad leads to a greater perception of psychic distance, and subsequently escapism, hedonic value, and satisfaction with the tourism experience.

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