Price Variation Antagonism and Firm Pricing Policies

Pascal Courty and Mario Pagliero

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Abstract: Pricing schemes that vary prices in response to demand shocks may antagonize consumers and reduce demand. At the same time, consumers may take advantage of the opportunities offered by price changes. Overall, the net impact of varying price on demand is ambiguous. We investigate this issue empirically, exploiting a unique dataset from a firm that has experimented with different pricing schemes. Each scheme is characterized by how much prices respond to fluctuations in demand and generates different amounts of price variability. We find that greater variability in prices does not lead to diminished demand. We discuss the implications of our findings in terms of the consumer antagonism hypothesis.

Keywords: D01; D12; L86.; Consumer demand; consumer antagonism; price variation; responsive pricing; fairness.; L86; fairness (search for similar items in EconPapers)
Date: 2010-07-02
Note: View the original document on HAL open archive server: https://hal.science/hal-00840230v1
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Citations: View citations in EconPapers (6)

Published in Journal of Economic Behavior and Organization, 2010, 75 (2), pp.235. ⟨10.1016/j.jebo.2010.05.006⟩

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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 (2008)
Working Paper: Price Variation Antagonism and Firm Pricing Policies (2007)
Working Paper: Price Variation Antagonism and Firm Pricing Policies (2006)
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Persistent link: https://EconPapers.repec.org/RePEc:hal:journl:hal-00840230

DOI: 10.1016/j.jebo.2010.05.006

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