We study a seller's optimal pricing and inventory strategies when behavioral (non-pecuniary) motives affect consumers' purchase decisions. In particular, the seller chooses between two pricing strategies, markdown or everyday-low-price, and determines the optimal prices and inventory level at...

A gift card promotion provides customers an incentive to spend more than an expenditure level on regularly priced (as opposed to discounted) products, by rewarding customers with a gift card to be redeemed against a future purchase. This type of promotion is widely used by luxury fashion,...

We study a setting in which consumers can either purchase a product for which they have uncertain valuation and, hence, uncertain utility or choose an outside option for which their utility is certain. The uncertainty in the product valuation is resolved after a consumer chooses either of the...

We study and empirically quantify how much, in a markdown pricing situation, customers anticipate regret of paying a high price during the regular season or facing the possibility of a stockout during the markdown season. In addition, we provide a framework to quantify the impact of customer...

This paper empirically investigates using the e-mail channel to target customers with a delayed incentive promotion — specifically, gift card promotion — and derives data-driven e-mail targeting policies. Gift card promotions are popular across retailers because they incentivize customers to...