Pricing cues and retail competition

Anand Krishnamoorthy and Preethika Sainam

Journal of Retailing, 2025, vol. 101, issue 1, 55-67

Abstract: Retailers that do not consistently display pricing cues (e.g., “Save $200″) may face lower demand from consumers who do not benefit from the additional transaction utility, a fact that is well-documented in the extant literature. This study investigates why some retailers choose not to display pricing cues despite these documented benefits, how optimal prices are affected by the display of pricing cues, and which type of retailer – service-focused or price-focused – is more likely to display pricing cues.

Keywords: Pricing cue; Reference price; Transaction utility; Retail competition; Free riding; Price competition (search for similar items in EconPapers)
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:eee:jouret:v:101:y:2025:i:1:p:55-67

DOI: 10.1016/j.jretai.2024.12.002

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