Transaction Utility and Quality Choice

Q4 Business, Management and Accounting

Review of Marketing Science Pub Date : 2017-08-06 DOI:10.2139/ssrn.2595754

S. Sajeesh, Sangyoung Song

引用次数: 3

Abstract

Abstract This paper uses a game-theoretic model to examine the role of reference price for firms that vary in their quality positioning in competing for customers. Reference prices provide consumers with additional components of utility. Building on previous research on the impact of consumer decision making on firm strategies, we focus on how firms choose their positioning when consumer utility is driven not only by acquisition utility but also by the transaction utility associated with the purchase and how this, in turn, affects firms’ pricing decisions and profits. Considering a competition between two firms, this paper shows that the firm with higher product quality provides greater discounts to consumers. We also show that when firms are allowed to set a high ‘regular’ price, product differentiation is greater between the firms, and price competition is less intense. Furthermore, under some conditions, the profits of both firms can be higher than the benchmark case (when the effects of transaction utility are ignored).

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交易效用和质量选择

摘要本文使用博弈论模型来检验参考价格在不同质量定位的企业争夺客户中的作用。参考价格为消费者提供了额外的实用组件。在先前关于消费者决策对企业战略影响的研究基础上，我们重点关注当消费者效用不仅由购买效用驱动，而且由与购买相关的交易效用驱动时，企业如何选择自己的定位，以及这反过来如何影响企业的定价决策和利润。考虑到两家公司之间的竞争，本文表明，产品质量越高的公司向消费者提供的折扣越大。我们还表明，当允许企业设定高的“常规”价格时，企业之间的产品差异更大，价格竞争也不那么激烈。此外，在某些条件下，两家公司的利润都可能高于基准情况（当忽略交易效用的影响时）。

本文章由计算机程序翻译，如有差异，请以英文原文为准。

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来源期刊

Review of Marketing Science Business, Management and Accounting-Marketing

CiteScore

1.10

自引率

0.00%

发文量

期刊介绍： The Review of Marketing Science (ROMS) is a peer-reviewed electronic-only journal whose mission is twofold: wide and rapid dissemination of the latest research in marketing, and one-stop review of important marketing research across the field, past and present. Unlike most marketing journals, ROMS is able to publish peer-reviewed articles immediately thanks to its electronic format. Electronic publication is designed to ensure speedy publication. It works in a very novel and simple way. An issue of ROMS opens and then closes after a year. All papers accepted during the year are part of the issue, and appear as soon as they are accepted. Combined with the rapid peer review process, this makes for quick dissemination.