Pricing Strategy for Fashion Retailers Considering Anticipated Regret

Yongfang Mao
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Yongfang Mao: Beiijng Jiaotong University

A chapter in Proceedings of the 2023 International Conference on Finance, Trade and Business Management (FTBM 2023), 2023, pp 4-13 from Springer

Abstract: Abstract Under the multi-brand and fast-paced marketing, consumers' purchase decision is deeply affected by the regret of high price and shortage of stock, for this reason, many scholars propose to alleviate the impact of high price regret on strategic consumers by reducing the magnitude or possibility of price reduction, or to limit supply to reduce the impact of out of stock regret. However, retailers often cannot consider the feelings of consumers in both sales stages at the same time. In order to understand the impact of these two types of regret on retailer profits, this article constructs consumer utility functions and retailer profit functions for two scenarios: no regret psychological impact and regret psychological impact, and depicts the changes in the retailer's most profitable situation when the two regret psychological coefficients change in different directions through images, then we find that, when the reverse constant amplitude changes, the change in regret psychology with smaller coefficients has a greater impact on retailer profits; When changing in the same direction with equal amplitude, the change in regret psychology with a larger coefficient has a greater impact on retailer profits. Ultimately we provided some reference suggestions for mid-term pricing.

Keywords: High price regret; Out of stock regret; Strategic consumption behaviour; Pricing strategy; Mid-term pricing (search for similar items in EconPapers)
Date: 2023
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Persistent link: https://EconPapers.repec.org/RePEc:spr:advbcp:978-94-6463-298-9_2

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DOI: 10.2991/978-94-6463-298-9_2

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