The Pricing Strategy with the Effect of Reference Dependence Under Monopolistic Competition

DOI

10.2991/assehr.k.211209.042How to use a DOI?

Keywords

Monopolistic competition; reference dependence; loss aversion parameters; reference point

Abstract

As the consumers searching for the goods, it is very likely for them to use the strategy that choosing the product of the large firm as the reference point and compare it with the other products in order to purchase the most satisfied one. In the real world the market competition is most likely to be Monopolistic competition. The proposing of model in this work is based on this phenomenon. Consequently, this paper raised questions: in which sense the reference dependence and loss aversion parameter affect the pricing strategy of the different firms. The work finds out the reference dependence can still affect the pricing of products either for the large and small firms under monopolistic market and its effect is shown a downward trend as consumers searching times increased. The producers can choose to adapt their pricing strategy to the result which have been discovered in this paper and reply to the consumer behaviors.

Copyright

© 2021 The Authors. Published by Atlantis Press International B.V.

Open Access

This is an open access article under the CC BY-NC license.

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TY  - CONF
AU  - Hongzhou Zhu
AU  - Meihang Huang
AU  - Fengqin Zhu
PY  - 2021
DA  - 2021/12/15
TI  - The Pricing Strategy with the Effect of Reference Dependence Under Monopolistic Competition
BT  - Proceedings of the 2021 3rd International Conference on Economic Management and Cultural Industry (ICEMCI 2021)
PB  - Atlantis Press
SP  - 252
EP  - 258
SN  - 2352-5428
UR  - https://doi.org/10.2991/assehr.k.211209.042
DO  - 10.2991/assehr.k.211209.042
ID  - Zhu2021
ER  -