Optimal introductory pricing as an investment decision

Per Kristian Alnes, Erik Haugom and Gudbrand Lien

Applied Economics Letters, 2025, vol. 32, issue 14, 2003-2009

Abstract: In this article, we propose a model that can be used to calculate the optimal introductory price for any product or service offered in a market. We view the introductory pricing problem as an investment decision with uncertain future cash flows. In this setup, the initial investment is the foregone income of lower period 1 revenues to generate higher expected cash flows from subsequent periods. We empirically test the model using data from a survey in the alpine skiing industry and show that it provides meaningful results.

Date: 2025
References: Add references at CitEc
Citations:

Downloads: (external link)
http://hdl.handle.net/10.1080/13504851.2024.2332519 (text/html)
Access to full text is restricted to subscribers.

Related works:
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:taf:apeclt:v:32:y:2025:i:14:p:2003-2009

Ordering information: This journal article can be ordered from
http://www.tandfonline.com/pricing/journal/RAEL20

DOI: 10.1080/13504851.2024.2332519

Access Statistics for this article

Applied Economics Letters is currently edited by Anita Phillips

More articles in Applied Economics Letters from Taylor & Francis Journals
Bibliographic data for series maintained by Chris Longhurst ().