Consumer Resistance

Daniel Halbheer (), Marco Bertini () and Stefan Buehler

No 1251, HEC Research Papers Series from HEC Paris

Abstract: This paper studies the impact of consumer resistance, which is triggered by deviations from a psychological reference point, on optimal pricing and cost communication. Assuming that consumers evaluate purchases not only in the material domain, we show that consumer resistance reduces the pricing power and profit. We also show that consumer resistance provides an incentive to engage in cost communication when consumers underestimate cost. While cheap communication does not affect behavior, persuasive communication may increase sales and profit. Finally, we show that a firm can benefit from engaging in operational transparency by revealing information about features of the production process.

Keywords: Price Fairness; Cost Communication; Operational Transparency (search for similar items in EconPapers)
JEL-codes: L11 L21 M31 (search for similar items in EconPapers)
Pages: 30 pages
Date: 2018-02-08, Revised 2018-02-16
New Economics Papers: this item is included in nep-knm and nep-mkt
References: Add references at CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://papers.ssrn.com/sol3/papers.cfm?abstract_id=3120448 Full text (application/pdf)

Related works:
Working Paper: Consumer Resistance (2018)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:ebg:heccah:1251

Access Statistics for this paper

More papers in HEC Research Papers Series from HEC Paris HEC Paris, 78351 Jouy-en-Josas cedex, France. Contact information at EDIRC.
Bibliographic data for series maintained by Antoine Haldemann ().