Resource title

An empirical test of theories of price valuation using a semiparametric approach, reference prices, and accounting for heterogeneity

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Resource description

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 different reference prices. The study builds on earlier research by Kalyanaram and Little (1994); however, in contrast to their work, we use parametric and semiparametric approaches to detect the structure of the underlying data sets. The different models are tested using a program module in GAUSS that was able to account for heterogeneity. The model types were calibrated by a simulation study. The calibrated modules were then used to analyze real market data.

Resource author

Yasemin Boztu─č, Lutz Hildebrandt

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Resource publish date

Resource language

eng

Resource content type

text/html

Resource resource URL

http://hdl.handle.net/10419/25076

Resource license

Adapt according to the presented license agreement and reference the original author.