Dynamic pricing decisions by potential tourists under uncertainty: The effects of tourism advertising

2018 ◽  
Vol 25 (2) ◽  
pp. 213-234 ◽  
Author(s):  
Hongjuan Song ◽  
Yushi Jiang
Keyword(s):  
Dynamic Pricing ◽  
Reference Price ◽  
Risk Preferences ◽  
Uncertain Information ◽  
Informative Advertising ◽  
Pricing Decisions ◽  
Tourism Advertising ◽  
Reference Prices ◽  
Current Price ◽  
Advertising Exposure

The aim of this study is to examine the advertising information learning processes of potential tourists and observe how potential tourists sequentially adjust their perceived reference prices and purchase intentions with different risk preferences and choices with respect to gains (the current price is lower than the consumer’s reference price) or losses (the current price is higher than the reference price). In this study, a Bayesian experiment was conducted to elicit reference prices in the presence of tourism advertising with uncertain information. The findings show that with respect to gains, risk avoiders do not reduce their reference prices as significantly as do risk seekers when exposed to price-informative advertising. Exposure to image advertising changes potential tourists’ risk preferences, and the reference price drops more significantly for risk avoiders than for risk seekers. With respect to losses, informative and image advertising impact the reference price for participants with different risk preferences but not at a statistically significant level.

scholarly journals Dynamic Pricing Decisions and Seller-Buyer Interactions under Capacity Constraints

Games ◽  
2018 ◽  
Vol 9 (1) ◽  
pp. 10 ◽  
Author(s):  
Vincent Mak ◽  
Amnon Rapoport ◽  
Eyran Gisches
Keyword(s):  
Dynamic Pricing ◽  
Capacity Constraints ◽  
Pricing Decisions

Technical Note—Dynamic Pricing with Gain-Seeking Reference Price Effects

2016 ◽  
Vol 64 (1) ◽  
pp. 150-157 ◽  
Author(s):  
Zhenyu Hu ◽  
Xin Chen ◽  
Peng Hu
Keyword(s):  
Dynamic Pricing ◽  
Reference Price ◽  
Technical Note ◽  
Price Effects

Dynamic pricing in the presence of competition with reference price effect

2014 ◽  
Vol 8 ◽  
pp. 3693-3708 ◽  
Author(s):  
S. Kachani ◽  
Y. Oumanar ◽  
N. Raissi
Keyword(s):  
Dynamic Pricing ◽  
Reference Price ◽  
Price Effect

scholarly journals Equilibrium decisions on pricing and innovation that impact reference price dynamics

2021 ◽  
Vol 0 (0) ◽  
pp. 0
Author(s):  
Shaokun Tao ◽  
Xianjin Du ◽  
Suresh P. Sethi ◽  
Xiuli He ◽  
Yu Li
Keyword(s):  
Supply Chain ◽  
Steady State ◽  
Reference Price ◽  
Stackelberg Game ◽  
Interactive Effect ◽  
Wholesale Price ◽  
Retail Price ◽  
Price Ratio ◽  
Reference Prices ◽  
Consumer Memory

<p style='text-indent:20px;'>Previous studies have confirmed that reference prices play an essential role in consumer purchasing decisions, and some researchers have suggested that reference prices are positively influenced by innovation. Therefore, we construct an interactive effect of innovation and reference price to study their combined impact on supply chain decisions. We model a supply chain, where a manufacturer determines the innovation level and the wholesale price while the retailer controls the retail price, as a dynamic Stackelberg game. We show that the interactive effect causes the steady-state wholesale and retail prices to increase, thus motivating the manufacturer to increase innovation investment. We see that the retail price and the level of innovation increase in reference price effect whereas they decrease in consumer memory. The centralized firm has a higher steady-state innovation level and innovation/price ratio and lower steady-state retail price compared to the decentralized supply chain. Consumers also benefit from the interactive effect as well as from centralization. Finally, we use numerical analysis to demonstrate our results and offer some managerial implications.</p>

Fixed, flexible, and dynamics pricing decisions of Airbnb mode with social learning

2020 ◽  
pp. 135481661989695 ◽  
Author(s):  
Yuting Chen ◽  
Rong Zhang ◽  
Bin Liu
Keyword(s):  
Social Learning ◽  
Dynamic Pricing ◽  
Positive Impact ◽  
Sharing Economy ◽  
Competitive Market ◽  
Risk Level ◽  
Risk Sensitivity ◽  
Peak Period ◽  
Pricing Decisions ◽  
Pricing Decision

The rise of the sharing economy has changed the traditional way of providing service to consumers. Airbnb is the most successful peer-to-peer model in the hospitality industry. This article investigates how to conduct strategic dynamic pricing in a competitive market by considering market conditions, quality, and risk sensitivity. Our research yields three main conclusions. First, we observe that the higher the risk level suppliers face, the more profit they will get; the lower the risk level consumers face, the more utilities they obtain. Second, we find that fixed pricing may be optimal or near-optimal for the platform when market size is small, the accommodation quality is better, and consumers’ reliability is low. Otherwise, a flexible pricing strategy is optimal. Finally, we extend the research into dynamic pricing decision in presence of Bayesian social learning and propose that the less-perfect accommodation requires social learning more urgently. In tourism peak period, social learning has less positive impact when the Airbnb accommodation is much perfect. These conclusions provide useful guidance on how the Airbnb and hotel can take advantage of the competitive market.

Dynamic Pricing Game Under Different Channel Power Structures in a Closed-Loop Supply Chain

2020 ◽  
Vol 30 (04) ◽  
pp. 2050052
Author(s):  
Junhai Ma ◽  
Fang Zhang ◽  
Hui Jiang
Keyword(s):  
Supply Chain ◽  
Supply Chains ◽  
Dynamic Pricing ◽  
Reference Price ◽  
Closed Loop ◽  
Stable Region ◽  
Power Structures ◽  
Closed Loop Supply Chain ◽  
Channel Power ◽  
Advantageous Position

The importance of closed-loop supply chains has been widely recognized both in academic communities and in industrial sectors. This paper starts from the traditional supply chains and the new self-supply chain of GREE to extract realistic problems, to mainly investigating two noncooperative dynamic pricing policies in a dual-channel closed-loop supply chain consisting of a manufacturer and a retailer. Then, it studies the influence of different channel power structures on dynamic decisions and their complexities. Furthermore, the reference price affects the purchase decisions of consumers. Therefore, the model takes into account the influence of reference price of the market demands. Results show that the manufacturer who opens up a direct channel can make a huge profit in the game. In the dynamic game evolution process, the game leader is in a more advantageous position when the system is in a stable region; once entering into the bifurcating region or chaotic region, the game follower needs to adjust his price to follow the leader’s decision in order to make a profit. In addition, the system’s stable region becomes smaller when the market demand becomes more sensitive to the difference between the reference price and the actual price. In this model, if the manufacturer acts as a leader, he is in a more advantageous position when the market is sensitive to channel competition in the stable stage while the result is opposite in the unstable stage.

scholarly journals When Internal Reference Prices and Price Expectations Diverge: The Role of Confidence

2007 ◽  
Vol 44 (3) ◽  
pp. 401-409 ◽  
Author(s):  
Manoj Thomas ◽  
Geeta Menon
Keyword(s):  
Reference Price ◽  
Internal Reference ◽  
Price Expectations ◽  
Price Expectation ◽  
Reference Prices ◽  
Internal Reference Price ◽  
Pricing Theory

When do internal reference prices differ from articulated price expectations? The authors propose that the internal reference price depends not only on the magnitude of the expected price but also on the confidence associated with this expectation. Four experiments delineate the effects of price expectation and confidence on the internal reference price. In Experiments 1 and 2, the authors manipulate repetition and examine the effects of repetition-induced confidence on price judgments. In Experiments 3 and 4, they manipulate confidence directly to investigate its effects on judgments. The results from all four experiments suggest that consumers with less confidence have higher internal reference prices than more confident consumers, even when they do not differ in their articulated price expectations. The authors discuss the implications of these results for pricing theory.

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