Competitive strategies when consumers are relative thinkers : implications for pricing, promotions, and product choice

Roman Inderst, Martin Obradovits

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.

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Year of publication:	[2020]
Authors:	Inderst, Roman ; Obradovits, Martin
Publisher:	Innsbruck, Austria : Research platform Empirical and Experimental Economics, University of Innsbruck
Subject:	Relative Thinking \| Price Competition \| Promotions \| Product Choice \| Product Heterogeneity \| Managerial Implications \| Konsumentenverhalten \| Consumer behaviour \| Preiswettbewerb \| Price competition \| Theorie \| Theory \| Verkaufsförderung \| Sales promotion \| Preismanagement \| Pricing strategy \| Wettbewerbsstrategie \| Competitive strategy \| Produktdifferenzierung \| Product differentiation