Chenavaz, Régis - In: Economics: The Open-Access, Open-Assessment E-Journal 10 (2016) 2016-22, pp. 1-17
A firm that accounts for consumer behavior sets the selling price of a product considering the reference price of … consumers. In the literature, a reference price is usually modeled as depending on past selling prices. That is, past selling … increase the price elasticity of demand, the demand function becoming flatter. Thus, the reference price effect weakens the …