Price Variation Antagonism and Firm Pricing Policies

Pascal Courty and Mario Pagliero

No ECO2006/27, Economics Working Papers from European University Institute

Abstract: Survey evidence suggests firms do not use pricing policies that vary prices in response to demand changes because they fear that such practices would antagonize consumers. We investigate this hypothesis using a dataset from a firm that has experimented with different pricing schemes. Each scheme is characterized by how much prices respond to demand variations. We find evidence that is consistent with the hypothesis that consumers take advantage of the opportunities offered by price changes and inconsistent with the hypothesis that consumers are antagonized by price changes caused by demand shocks.

Keywords: Consumer demand; responsive pricing; fairness; price rigidit (search for similar items in EconPapers)
JEL-codes: D01 D12 L86 (search for similar items in EconPapers)
Date: 2006
New Economics Papers: this item is included in nep-mic and nep-mkt
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Citations: View citations in EconPapers (1)

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Related works:
Journal Article: Price variation antagonism and firm pricing policies (2010)
Working Paper: Price Variation Antagonism and Firm Pricing Policies (2010)
Working Paper: Price Variation Antagonism and Firm Pricing Policies (2008)
Working Paper: Price Variation Antagonism and Firm Pricing Policies (2007)
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