Price Matching Research Articles

Two-Stage Bidding Strategy for Peer-to-Peer Energy Trading of Nanogrid

With more distributed energy resources penetrated into the residential community, nanogrid based peer-to-peer (P2P) energy market has rapidly emerged over recent years. Due to the complexities on the decision-making process of each market participant, an efficient, fair and beneficial oriented bidding strategy is thus necessary. In this article, a two-stage bidding strategy for P2P trading of nanogrid is proposed. To overcome the limitations of traditional methods, in the first stage, a supply-demand relationship considered two-step price predictor, which aims to promote the usage of local renewable energy, is formulated to provide the guidance on transaction adjustment. In the second stage, trading preference based simultaneous game-theoretic approach is fully introduced, which can optimize the market equilibrium and then increase the social welfare of the P2P market. Additionally, to mitigate the possible failure of price matching, value-at-risk is implemented through the trading process as a risk hedging tool. To verify the effectiveness of the proposed strategy, usages of local renewable energy, economic benefits and success rates of transaction is compared against the traditional method for various cases.

ЕВОЛЮЦІЯ ЕКОНОМІЧНОЇ ДУМКИ ЩОДО ПРОБЛЕМ РОЗВИТКУ Й РЕГУЛЮВАННЯ РИНКУ ПРАЦІ

Structural shifts in the labor market are due to the transformation of social and economic relations in today's globalized world. The purpose of the study is to substantiate the conceptual and methodological foundations of the economic thought development on the evolution of scientific approaches (scientific schools) to theoretical concepts of research and justification of the labor market. The conceptual provisions of the study of the labor market within the classical school are considered: free competition, the dependence of wages and labor supply, and the level of wages. The peculiarities of the labor market understanding as a market of goods of a special kind - "labor" within the framework of Marxist theory are determined. The basic postulates of neoclassical opinion on labor market research are considered, which implies free competition and non-interference by the state in regulation. Key provisions of Keynesian labor market theory are presented regarding the need for systematic state intervention in the economic environment. The neo-Keynesian theory of labor market regulation has been considered: models with stable prices and wages; approaches to the analysis of the labor market (the theory of «wage efficiency», the theory of «outsider-insiders», the theory of «employment as an investment decision»). The concept content of the natural level of unemployment is revealed in the modern conservative trend in economic theory. The general position of the monetarists on the labor market is generalized in favor of monetary influence instruments on the economy, including unemployment. Institutionalists' perceptions of the labor market are considered in analyzing professional and sectoral gaps in the structure of the labor force and in wages. The key provisions of the contract employment theory are given. The characteristic features of the flexible market concept are presented, which provides the deregulation of the labor market. A number of definitions of leading scientists on the content of the labor market have been generalized and the own definition has been provided - as a system of public relations to the purchase and sale of labor, as a sphere of labor demand and supply, as a mechanism for price matching and working conditions between employers and employees. Keywords: labor market, employment, economic activity of the population, labor force, labor resources, regulation.

How Does Heterogeneous Consumer Behavior Affect Pricing Strategies of Retailers?

This paper presents the latest progress on pricing and revenue management. Consumer's switching purchase behavior occurs frequently in perishable goods retail market, and we propose a two-period dynamic pricing model among online and offline retailers under heterogeneous purchase behavior of myopic consumers and strategic consumers. Through equilibrium solution and analysis, this study discusses the optimal pricing strategy under the influence of the service perception factor and the proportion of two kinds of consumers. Moreover, this paper analyzes the effect of three pricing strategies on profits to prove the effectiveness of price matching strategy implemented by offline retailers. The results show that the strategic behavior of heterogeneous consumers does not always have a negative impact on the profits of two retailers. The offline retailers can strategically choose to set higher prices to increase profits, and online retailers can also reduce the impact of heterogeneous consumer behavior by disclosing product attribute information. It is unwise for online retailers to take the initiative to match the price set by the offline retailers. In contrast, offline retailers can achieve a win-win situation for both retailers by matching the price of the online retailers actively.

보상액이 내생변수인 경우의 최저가격보상제 효과에 대한 분석

두 유형의 소비자가 있고 기업이 보상액을 결정할 수 있는 시장에서의 최저가격보상제의 효과를 분석한다. 차액보다 적게 보상해 주는 보상제는 실시되지 않으며 차액보다 많이 보상해주는 제도의 효과는 보상액의 크기에 상관없이 동일하다. 차액만큼 보상해 주는 보상제는 충성스런 소비자가 많지 않으면 항상 실시되며 보상제 실시로 이윤이 같거나 증가한다. 차액만큼 보상해주는 보상제와 차액보다 많이 보상해 주는 보상제의 차이점은 충성스런 소비자의 수가 적은 경우 발생한다. 첫째, 충성스런 소비자의 수가 매우 적으면 차액보다 많이 보상해주는 제도는 실시되지 않는다. 둘째, 충성스런 소비자의 수가 적당히 적은 경우, 가격에 민감한 소비자의 수요가 탄력적이면 차액보다 많이 보상해 주는 보상제가 실시되지만 이윤이 감소한다. 따라서 기업은 차액보다 많이 보상해주는 경우에 죄수의 딜렘마에 놓일 수 있다. 마지막으로 기업이 보상액을 결정할 수 있는 경우, 충성스런 소비자가 적으면 차액만큼 보상해 주는 제도가 실시되지만, 많으면 보상제는 실시되지 않는다. 충성스런 소비자의 수가 많지도 적지도 않으면 두 보상제는 동일하며, 보상제가 실시된다.

What drives customers’ post-purchase price search intention in the context of online price matching guarantees

Using a research model based on customer value theory, this study investigates the determinants of customer post-purchase price comparison searches in the context of online price-matching guarantees (PMG). Data collected from 222 eligible respondents are tested against the proposed research model using partial least squares structural equation modeling (PLS-SEM). The results indicate two PMG characteristics, refund length and refund scope, influence utilitarian benefit (i.e., refund depth) and hedonic benefit (i.e., playfulness). These two benefits subsequently contribute to customer perceived value, which leads to price search intentions. This study pioneers the exploration of online PMGs and the determinants of customer post-purchase price search intentions. Several important theoretical and practical implications can be drawn from the findings to guide online retailers’ PMG strategies.

The Impact of Cost Reduction on Price Matching Strategy in the Presence of Hybrid Consumers

This article mainly considers the impact of cost reduction on price matching strategy when a firm sells products in two periods. The cost reduction in the second period is due to technological advancement and production learning. The market is made up of myopic consumers and strategic consumers. The conclusions show that firm’s optimal profit will decrease with the increase of the fraction of strategic consumers. Besides, when the production learning effect dominates, the firm sells at a reduced price in two periods. When the technological advancement effect dominates, the firm maintains a uniform price for sale throughout the sales period. Finally, both the technological advancement and production learning effect can effectively reduce the loss of profits caused by strategic consumers, and the effect of the technological advancement is more significant.

Variation in Prescription Drug Prices by Retail Pharmacy Type

Cash prices for prescription drugs vary widely in the United States. To describe cash price variation by retail pharmacy type for 10 generic and 6 brand-name drugs throughout the United States and stratified by ZIP code. Cross-sectional study. Drug pricing data from GoodRx, an online tool for comparing drug prices, representing more than 60000 U.S. pharmacies (fall 2015). Cash prices for a 1-month supply of generic and brand-name drugs were ascertained. Stratified by ZIP code, relative cash prices for groups of generic and brand-name drugs were estimated for big box, grocery-based, small chain, and independent pharmacies compared with a reference group of large chain pharmacies. Across 16325 ZIP codes, 68353 unique pharmacy stores contributed cash prices. When stratified by 5-digit ZIP code, the relative cash prices for generic drugs at big box, grocery-based, small chain, and independent pharmacies compared with those at large chain pharmacies were 0.52 (95% CI, 0.51 to 0.53), 0.82 (CI, 0.81 to 0.83), 1.51 (CI, 1.45 to 1.56), and 1.61 (CI, 1.58 to 1.64), respectively. The relative cash prices for brand-name drugs were 0.97 (CI, 0.96 to 0.97), 1.00 (CI, 0.99 to 1.00), 1.06 (CI, 1.05 to 1.08), and 1.03 (CI, 1.02 to 1.04), respectively. Results may not reflect current drug prices and do not account for point-of-sale discounts or price matching that may be offered by smaller pharmacies. Compared with large chains, independent pharmacies and small chains had the highest cash prices for generic drugs and big box pharmacies the lowest. Relative differences in cash prices for brand-name drugs were modest across types of retail pharmacies. Arnold Ventures.

Are Low Price and Price Matching Guarantees Equivalent? The Effects of Different Price Guarantees on Consumers’ Evaluations

Some retailers offer price match guarantees, whereas others offer guarantees making the same promise but labeling these low-price guarantees. Do consumers respond differently to these different price guarantee labels? To address this research question, this paper leverages insights from pricing, signaling, and regulatory focus theories to demonstrate – across multiple studies – that consumers perceive price match versus low price guarantees differently. In turn, contingent on consumers’ regulatory focus, this difference in perceptions feeds forward and influences consumers’ purchase intentions and post purchase (e.g., repurchase) intentions. This paper contributes to theory, not only by showing differences across price match versus low price guarantees, but also by being the first to jointly examine purchase and post purchase intentions relating to price guarantees. This paper also speaks to practice, noting contingencies that determine whether the price match or the low-price guarantee label should be used.

E-커머스의 차별화마케팅 전략이 소비자만족과 재구매의도에 미치는 영향

This research analyzed how the differentiated marketing strategies of e-commerce including price matching, regular delivery and rocket delivery can influence customer satisfaction and repurchase intention. First, through literature review, the research hypotheses were set concerning e-commerce''s differentiated marketing strategies, this research conducted factor analysis, correlation analysis and regression analysis. As a result, the established 7 hypotheses were all verified. To be specific, matching price positively affected customer satisfaction and repurchase intention as it provides customers with economic benefits and confidence in lower price. Regular delivery also had a positive influence on customer satisfaction and repurchase intention by reducing shopping effort as well as economic benefits which can boost repeat purchases. Rocket delivery positively influenced customer satisfaction and repurchase intention as well, through fast delivery and holiday shipping. Lastly, customer satisfaction by the differentiated marketing strategies positively influenced repurchase intention. This research confirmed that e-commerce’s differentiated marketing had a positive impact on customer satisfaction and repurchase intention. However, with regards to the recent 3 years management performance of COUPANG who has adopted the differentiated marketing strategies, whereas sales has increased, operating profit has decreased. This demonstrates that excessive investment and low-cost strategies, followed when differentiated marketing strategies are implemented can have a negative effect on management. Thus, further research will be needed to analyze this point in the future.

When should the offline retailer implement price matching?

In this paper, we develop a duopoly game using the Hotelling model, in which customers are uniformly distributed along the Hotelling line, and a brick-and-mortar retailer who sits on the left end of the line competes with an online retailer. The brick-and-mortar retailer is the Stackelberg leader facing strategic customers and the online retailer is the follower. Strategic customers may free ride on the BM retailer's service by first visiting the BM retailer and experiencing the product, but then switching to the online retailer to buy the product, if the retail price at the online retailer is sufficiently low. The conditions under which the BM retailer should or should not implement a price matching strategy are identified. If the cost of shopping online is high, the BM retailer can ignore the strategic customers’ behavior; there is no incentive to switch to buy the product online. When the customer's shopping cost is moderate, the BM retailer should implement a price matching strategy to prevent strategic customers from switching to the online retailer. When the cost of shopping online is low, the BM retailer should not try to match the price of the online retailer. We also show that the BM retailer's profit may increase, while the online retailer's profit may decrease, with the portion of strategic customers in the market, when the BM retailer implements a price matching strategy. When the fraction of strategic customers is sufficiently high, the BM retailer will not implement price matching strategy.

Dynamic pricing with reference price effect and price-matching policy in the presence of strategic consumers

In this paper, we consider a retailer that sells a product with high storage cost over a two-period horizon. The goal is to investigate the single and combined effects of reference price and price-matching (PM) on the purchasing behavior of consumers and determine how these affect the retailer’s optimal pricing decisions and optimal total discounted revenue. We first present a discrete-time dynamic pricing (DP) model over a two-period horizon with a reference price effect in the presence of strategic consumers. Then we subsequently extended to another DP model in which the retailer implements a PM policy. The results show that under the reference price effect, the retailer’s revenue will always decrease, even when a PM policy is implemented. The PM policy is not always beneficial for the retailer, especially when the discount factor is infinitely close to 1. Second, we propose a model misspecification approach to investigate the effect of the reference price. Furthermore, the value of a PM policy is discussed. We find that the value of a PM policy is generally best when the discount factor is at a threshold value and also that the value of PM is much greater in the presence of strategic purchasing behavior.

Price Match Guarantees in the Age of Showrooming: An Empirical Analysis

Consumer showrooming – the behavior of examining a product in a brick-andmortar store and later buying it from an online retailer – is seen as a major threat to brick-and-mortar retailers. To combat showrooming, Best Buy announced a price-matching policy in 2012 to compete with major online retailers. In this paper, we examine the impact of Best Buy’s price-matching policy on the price competition between Best Buy and Amazon across a wide variety of product categories. We empirically explore Best Buy’s and Amazon’s pricing patterns using unique datasets collected from different sources, and find robust results that the competitive effect of the price-matching policy depends on the showrooming value of a product. For those products that offer consumers large value from physical store experiences – i.e., the “showrooming products” – the policy led to more intense price competition. Moreover, Amazon cut prices more aggressively than Best Buy. For those products that offer relatively small showrooming value – i.e., the “non-showrooming products” – it alleviated price competition. We also provide theoretical explanations for the findings and illustrate why the price matching policy did not reduce the price gaps between Amazon and Best Buy.

Showrooming and Webrooming: Information Externalities Between Online and Offline Sellers

In a product market where consumers are open to uninformed purchases, we study competition between a traditional and an online retailer in the presence of showrooming. Several results are obtained. First, showrooming intensifies competition and lowers both firms’ profits, thus supporting traditional and online retailers’ recent strategy of carrying more exclusive varieties. Second, lowering consumer search costs may aggravate showrooming and decrease the traditional retailer’s profits for intermediate search costs. Third, opening an online store expands the demand of the traditional retailer but intensifies competition, thus lowering its profits under certain conditions. Fourth, a return policy by the online retailer alleviates showrooming and relaxes competition but weakly reduces its demand, increasing its profits only for intermediate search costs. The return policy (weakly) increases the traditional retailer’s profits. Fifth, when search cost is not high enough, price matching by the traditional retailer may also intensify competition and hurt its profits. We then examine how webrooming interacts with showrooming. When webrooming resolves partial match uncertainty, it may increase both firms’ profits by inducing more consumers to participate. The online appendix is available at https://doi.org/10.1287/mksc.2018.1084 .

Price Matching Strategy: Implications of Consumer Behaviour and Channel Structure

Price Matching Strategy: Implications of Consumer Behaviour and Channel Structure

Implications of Price Matching in Supply Chain Negotiation

Problem definition: Few papers have explored the impact of price matching negotiation (PM), in which a channel matches its price with the resulting wholesale price bargained by another channel, on firms' performances, consumer welfare, and social welfare, with and without supply chain coordination. Academic/practical relevance: Negotiation has been widely seen in determining both uniform and discriminatory wholesale prices, which affect outcomes of competitive supply chain practices. Methodology: To characterize the PM mechanism, we utilize game theory and Nash bargaining theory to compare PM with simultaneous negotiation (SN) through a common-seller two-buyer differentiated Bertrand competition model. Results: Our analysis reveals that PM can benefit the seller but hurt all buyers, which is at odds with some fair wholesale pricing clauses intending to protect buyers. Under coordination with side payments, however, all firms can conditionally benefit more from PM than from SN. In spite of firms' gains, PM leads to less consumer utility and social welfare as compared to SN, unless the second buyer in PM is considerably less powerful than the first buyer. Coordination further worsens PM's negative impact on consumer utility and social welfare. Moreover, the existence of a spot market can increase the wholesale price in PM, hurting buyers, consumers, and society. Furthermore, the qualitative results about PM remain robust under an alternative disagreement point for PM, multiple buyers, and other extensions. Managerial implications: This paper delivers insights on when price matching in supply chain wholesale price negotiation can benefit a seller, buyers, consumers, and society in a variety of scenarios. It advocates how managers can utilize PM to their own advantages and provides rationale to decision makers for policy regulations regarding wholesale pricing.

Output Decisions and Price Matching: Theory and Experiment

We study the effects of price matching in a setting in which each firm selects both its price and output, simultaneously. We show that the availability of a price-matching option leads to the Cournot outcome in this setting. Our experimental study confirms this result in the laboratory. Our finding is a stark contrast to the one obtained in the standard price competition that the most likely market price in the presence of a price-matching option is the monopolistic price. In addition, we show that price matching benefits consumers in markets with a large number of firms. If a market has a few firms, then the effects of price matching on consumers depend on the market demand and cost functions. Thus, our study suggests that the effect of price matching depends on the strategic variables of the firms. Data and the online appendix are available at https://doi.org/10.1287/mnsc.2017.2788 . This paper was accepted by Eric Anderson, marketing.

Managing Posterior Price Matching: The Role of Customer Boundedly Rational Expectations

The posterior price-matching policy, whereby a firm promises to reimburse the price difference to a customer who purchases a product before the firm marks it down, has been used in practice. The extensive literature has offered the following explanations for why posterior price matching is adopted: to reduce inventory, to soften competition, to price discriminate consumers, and to eliminate consumer strategic waiting incentives. In this paper, we provide a novel explanation and investigate the role of consumer bounded rationality in the sense of anecdotal reasoning. We adopt a simple model that allows us to isolate the role of customer bounded rationality on using posterior price matching. We demonstrate that while it is never optimal to adopt posterior price matching when consumers have rational expectations, it can be optimal when they have boundedly rational expectations. We show when and how a seller can intentionally mark down with some probability and adopt price matching to make a profit. Ignoring customer bounded rationality can result in a significant profit loss. Then, we build a dynamic programming model to investigate how the firm should dynamically manage its markdowns over the long run. We show that a cyclic policy switching between a high and low markdown probability is typically optimal for exploiting customer bounded rationality. We characterize the nature of the cyclic policy and the range in which it is optimal. Our findings underscore the importance of consumer bounded rationality and provide managerial and practical guidelines on how to manage price matching when customers are boundedly rational. The online supplement is available at https://doi.org/10.1287/msom.2016.0612 .

On the Impact of Uncertain Cost Reduction When Selling to Strategic Customers

Many products undergo cost reductions over their product life cycles. However, strategic customers may have more incentive to wait if they expect a cost reduction to lead to a price drop. A firm that does not face any uncertainty can use pricing strategies such as price commitment and price matching to alleviate the strategic waiting of customers. However, these pricing strategies provide less flexibility than dynamic pricing for a firm facing uncertainty. In this paper, we examine the impact of cost reduction under dynamic pricing, price commitment, and price matching when cost reduction can come from production learning or from technology advancement. The firm makes pricing decisions when facing uncertainty in future cost, and strategic customers decide whether to wait when facing uncertainty in future price. We show that in general the firm’s profit is higher when future cost is more uncertain, but not necessarily when cost reduction is more significant. In addition, production learning and technology advancement can have opposite effects on the optimal pricing decisions and the choice of pricing strategy. This paper was accepted by Yossi Aviv, operations management.

Do state minimum markup/price laws work? Evidence from retail scanner data and TUS-CPS

BackgroundMinimum markup/price laws (MPLs) have been proposed as an alternative non-tax pricing strategy to reduce tobacco use and access. However, the empirical evidence on the effectiveness of MPLs in increasing...

Price-Matching Strategies on the German Gasoline Retail Market

This article investigates how prices are affected by price matching in the German gasoline retail market. The effects are noted for implementing and consulted (i.e. retailers whose prices are matched) retailers. While analyzing an extensive panel data set, I find a 11-14% markup increase for a relatively more expensive brand. A relatively inexpensive brand and its consulted stations decrease their prices. Evidence is found that price matching can enhance other price discrimination strategies by 43%. I cannot verify theoretical and empirical literature predicting that price matching has competition-reducing motives.