article

Research Note---Estimating Heterogeneous Price Thresholds

Authors:

Nobuhiko Terui,

Wirawan Dony DahanaAuthors Info & Claims

Marketing Science, Volume 25, Issue 4

Pages 384 - 391

https://doi.org/10.1287/mksc.1050.0181

Published: 01 July 2006 Publication History

Abstract

A brand choice model with heterogeneous price-threshold parameters is used to investigate a three-regime piecewise-linear stochastic utility function. The model is used to explore the relationships between aspects of consumer price sensitivity and price thresholds using hierarchical Bayes modeling with the Markov chain Monte Carlo (MCMC) method. This study contributes to the modeling literature on discontinuous likelihoods in choice models. The empirical application using our scanner panel data set shows that the reference effect and loss aversion are more marked after price thresholds are taken into heterogeneous price response models. Furthermore, loss aversion is attenuated by using price thresholds than by an aggregate (homogeneity) model without price thresholds.

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Cited By

Ezawa MTabata T(2024)Research on Relationship Between Mental Accounting and Consumer Purchase BehaviorSocial Computing and Social Media10.1007/978-3-031-61305-0_15(221-233)Online publication date: 29-Jun-2024
https://dl.acm.org/doi/10.1007/978-3-031-61305-0_15
Zhou QFu SYang YDong C(2023)Joint pricing and inventory control with reference price effects and price thresholdsExpert Systems with Applications: An International Journal10.1016/j.eswa.2023.120993233:COnline publication date: 15-Dec-2023
https://dl.acm.org/doi/10.1016/j.eswa.2023.120993

Research Note---Estimating Heterogeneous Price Thresholds
1. Mathematics of computing
  1. Probability and statistics
    1. Probabilistic reasoning algorithms

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Linthicum, MD, United States

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Published: 01 July 2006

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Cited By

Ezawa MTabata T(2024)Research on Relationship Between Mental Accounting and Consumer Purchase BehaviorSocial Computing and Social Media10.1007/978-3-031-61305-0_15(221-233)Online publication date: 29-Jun-2024
https://dl.acm.org/doi/10.1007/978-3-031-61305-0_15
Zhou QFu SYang YDong C(2023)Joint pricing and inventory control with reference price effects and price thresholdsExpert Systems with Applications: An International Journal10.1016/j.eswa.2023.120993233:COnline publication date: 15-Dec-2023
https://dl.acm.org/doi/10.1016/j.eswa.2023.120993

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