Competitive Strategies when Consumers are Relative Thinkers: Implications for Pricing, Promotions, and Product Choice

Roman Inderst and Martin Obradovits ()

EconStor Preprints from ZBW - Leibniz Information Centre for Economics

Abstract: How should firms optimally choose prices and promotional strategies and how should they position their products when consumers are "relative thinkers"? We provide answers in a model that extends the seminal contributions of Varian (1980) and Narasimhan (1988) and derive both managerial implications and implications for empirical researchers with regards to promotional frequency and depth as well as observed product heterogeneity in the market.

Date: 2019
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https://www.econstor.eu/bitstream/10419/253658/1/Competitive_Strategies.pdf (application/pdf)

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Working Paper: Competitive Strategies when Consumers are Relative Thinkers: Implications for Pricing, Promotions, and Product Choice (2020)
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:esprep:253658

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