Two essays on strategic pricing.
详细信息
文摘
Price is a major element in the marketing mix. A marketing manager strategically sets pricing policies to achieve the company's objectives. Two essays focus on a pricing strategy commonly used by sellers, namely price discrimination. It refers to a practice in which a firm charges different prices to different consumers for the same good/service.;The first essay focuses on optimal pricing strategies for a mall when sales facilitated by the mall may be made outside it. While these "outside" sales are difficult to track in the physical mall, Internet malls track them by placing cookies on consumers when they visit the mall. We explore a new revenue share fee model (i.e., the All-Revenue-Share Fee model) which Internet malls use to capture the "outside" sales, and compare it with the commonly used Fixed Fee model. We suggest that a mall should price discriminate across product categories, not just by charging different amounts of fees, but by using Fixed Fees in some product categories and All-Revenue-Share Fees in others. We also suggest that an Internet mall should switch to an All-Revenue-Share Fee model when it gains higher efficiency in hosting, and when the cost for hosting an on-line store decreases as hosting technology advances.;In the second essay, we investigate the phenomenon where sellers use Minimum Price Guarantees (MPGs) to price discriminate between informed and uninformed buyers. We first discuss the theoretical perspectives of market equilibrium models in two market conditions: with and without MPGs. Then we conduct market experiments with interactive buyers and sellers. We show theoretically and experimentally that when sellers price discriminate, buyers search more, prices are lower, and price dispersion is wider in the presence versus absence of MPGs. More interestingly, when we compare our experimental results with theoretical predictions, we find that buyers search too much when MPGs are not offered and too little when they are offered.