Competitive Strategies when Consumers are Relative Thinkers: Implications for Pricing, Promotions, and Product Choice

Arbeitspapier

How should firms optimally choose prices and promotional strategies and how should they position their products when consumers are "relative thinkers"? We provide answers in a model that extends the seminal contributions of Varian (1980) and Narasimhan (1988) and derive both managerial implications and implications for empirical researchers with regards to promotional frequency and depth as well as observed product heterogeneity in the market.

Object Details

• Language: Englisch

References and Relationships

• Bibliographic citation: Series: Working Papers in Economics and Statistics ; No. 2020-25

Classification and Topics

• Classification: Wirtschaft ; Firm Behavior: Theory ; Market Structure, Pricing, and Design: Oligopoly and Other Forms of Market Imperfection ; Micro-Based Behavioral Economics: Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making‡ ; Production, Pricing, and Market Structure; Size Distribution of Firms ; Oligopoly and Other Imperfect Markets
• Subject: Relative Thinking ; Price Competition ; Promotions ; Product Choice ; Product Heterogeneity ; Managerial Implications

Contributors, Places and Time

• Event: Geistige Schöpfung
• (who): Inderst, Roman ; Obradovits, Martin
• Event: Veröffentlichung
• (who): University of Innsbruck, Research Platform Empirical and Experimental Economics (eeecon)
• (where): Innsbruck
• (when): 2020

Further information

• Handle: http://hdl.handle.net/10419/238249
• Last update: 10.03.2025, 11:43 AM CET