Loss Aversion and Heterogeneity in Price Sensitivity
Author | : David R. Bell |
Publisher | : |
Total Pages | : 25 |
Release | : 1993 |
Genre | : Brand choice |
ISBN | : |
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Author | : David R. Bell |
Publisher | : |
Total Pages | : 25 |
Release | : 1993 |
Genre | : Brand choice |
ISBN | : |
Author | : David R. Bell |
Publisher | : |
Total Pages | : 50 |
Release | : 1996 |
Genre | : Consumer behavior |
ISBN | : |
Author | : Ningyuan Chen |
Publisher | : |
Total Pages | : 35 |
Release | : 2018 |
Genre | : |
ISBN | : |
In modern retailing, frequent discounts are seemingly at odds with the idea that price variation antagonizes loss-averse consumers and hence diminishes their demand for products and services. We model a monopolist selling a product over time to loss-averse consumers who differ in their sensitivity to losses. Although the market is thus segmented, the firm cannot price-discriminate among consumers based on that sensitivity. We show that charging a long-run constant price may be suboptimal and then derive conditions under which the optimal policy is cyclic (e.g., a periodic markdown policy). These findings establish that loss aversion does not preclude price variation and thereby underscore the importance of incorporating consumer heterogeneity into pricing policies.
Author | : Harjoat Singh Bhamra |
Publisher | : |
Total Pages | : 74 |
Release | : 2013 |
Genre | : Capital assets pricing model |
ISBN | : |
Author | : Peter P. Wakker |
Publisher | : Cambridge University Press |
Total Pages | : 519 |
Release | : 2010-07-22 |
Genre | : Business & Economics |
ISBN | : 1139489100 |
Prospect Theory: For Risk and Ambiguity, provides a comprehensive and accessible textbook treatment of the way decisions are made both when we have the statistical probabilities associated with uncertain future events (risk) and when we lack them (ambiguity). The book presents models, primarily prospect theory, that are both tractable and psychologically realistic. A method of presentation is chosen that makes the empirical meaning of each theoretical model completely transparent. Prospect theory has many applications in a wide variety of disciplines. The material in the book has been carefully organized to allow readers to select pathways through the book relevant to their own interests. With numerous exercises and worked examples, the book is ideally suited to the needs of students taking courses in decision theory in economics, mathematics, finance, psychology, management science, health, computer science, Bayesian statistics, and engineering.
Author | : Scott A. Neslin |
Publisher | : Now Publishers Inc |
Total Pages | : 108 |
Release | : 2009 |
Genre | : Business & Economics |
ISBN | : 1601982801 |
Promotion Dynamics presents a comprehensive overview of the various dynamic effects of sales promotions.
Author | : |
Publisher | : |
Total Pages | : 442 |
Release | : 2000 |
Genre | : Management science |
ISBN | : |
Author | : SRUTHI. S, Dr Ravi Kumar Gupta |
Publisher | : Archers & Elevators Publishing House |
Total Pages | : |
Release | : |
Genre | : Antiques & Collectibles |
ISBN | : 9390996031 |
Author | : Andreas Fagereng |
Publisher | : International Monetary Fund |
Total Pages | : 69 |
Release | : 2018-07-27 |
Genre | : Business & Economics |
ISBN | : 1484370066 |
We provide a systematic analysis of the properties of individual returns to wealth using twelve years of population data from Norway’s administrative tax records. We document a number of novel results. First, during our sample period individuals earn markedly different average returns on their financial assets (a standard deviation of 14%) and on their net worth (a standard deviation of 8%). Second, heterogeneity in returns does not arise merely from differences in the allocation of wealth between safe and risky assets: returns are heterogeneous even within asset classes. Third, returns are positively correlated with wealth: moving from the 10th to the 90th percentile of the financial wealth distribution increases the return by 3 percentage points - and by 17 percentage points when the same exercise is performed for the return to net worth. Fourth, wealth returns exhibit substantial persistence over time. We argue that while this persistence partly reflects stable differences in risk exposure and assets scale, it also reflects persistent heterogeneity in sophistication and financial information, as well as entrepreneurial talent. Finally, wealth returns are (mildly) correlated across generations. We discuss the implications of these findings for several strands of the wealth inequality debate.
Author | : Ying Zhao |
Publisher | : |
Total Pages | : 250 |
Release | : 2001 |
Genre | : |
ISBN | : |