Behavioral studies and recent empirical research suggest higher levels of inventory on hand can lead consumers to increase consumption. Inventory on hand is therefore posited to exert two countervailing forces on the probability of purchase incidence. First, higher levels of inventory reduce the...

The authors develop and test a model to study the influence of inventory-on-hand and price-based reference points on the consumption rate of consumers. The model is motivated by recent theoretical and empirical research which suggests inventory pressure can cause consumers to increase...

In this paper we estimate and empirically test different behavioral theories of consumer reference price formation. Two major theories are proposed to model the reference price reaction: assimilation contrast theory and prospect theory. We assume that different consumer segments will use...