The note presents the behavioral or psychological aspects of consumer price index acceptance. Begins with a review of the traditional economic approach to product development and pricing, consumer price index acceptance – namely, that consumers should be prepared at any time purchase of a product exceeds perceived price. Asked this question in purely economic approach, and the concept of transaction “fairness” is introduced as an additional component of the consumer price index acceptance. By paired vignettes, the behavioral side t … Read more »

The note presents the behavioral or psychological aspects of consumer price index acceptance. Begins with a review of the traditional economic approach to product development and pricing, consumer price index acceptance – namely, that consumers should be prepared at any time purchase of a product exceeds perceived price. Asked this question in purely economic approach, and the concept of transaction “fairness” is introduced as an additional component of the consumer price index acceptance. By paired vignettes, product prices behavioral side explored in detail. At the end of the traditional economic perspective is combined with the pricing of behavioral or psychological perspective to a more realistic understanding of how consumers react to make decisions on a company’s pricing.
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John T. Gourville
12 pages.
Release date: 25 May 1999. Prod #: 599114-PDF-ENG
Note on Behavioral Pricing HBR case solution

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