Publications

July 1, 2022
Editorial

New Transparency Rule Helps Rein in Health Care Costs

By: Regina E. Herzlinger and Cynthia A. Fisher

Over the last year, consumer prices have grown 60% faster than wages. Employers can help their employees contend with this high inflation by addressing a long-running source: health care costs. View Details

Keywords: Healthcare Costs; Consumer Prices; Inflation and Deflation; Wages; Health Industry

August 2023
Background Note

Pricing and Customer Psychology

By: Elie Ofek

This note provides an overview of how psychological principles may be used as part of a seller’s pricing strategy. The note defines the concept of psychological pricing and explains the motivations for firms to engage in it. Prominent practices and tactics, with... View Details

Keywords: Price; Marketing Strategy; Consumer Behavior

20 May 2021
News

Inflation Rate Calculator: Customize Your Own Consumer-Price Index

August 1993 (Revised May 1994)
Case

American Airlines' Value Pricing (A)

By: Alvin J. Silk

In April 1992, American Airlines launched "Value Pricing" -- a radical simplification of the complex pricing structure that had evolved over more than a decade following deregulation of the U.S. domestic airline industry. American expected that the new pricing... View Details

Keywords: Price; Marketing Channels; Consumer Behavior; Performance Expectations; Value Creation; Aerospace Industry

28 Jun 2004
Research & Ideas

How to Avoid a Price Increase

When product companies see the cost of materials rise, the result for consumers is often a price increase (gasoline) or, less often, a smaller amount of product at the same View Details

Keywords: by Manda Salls

05 Jul 2006
Working Paper Summaries

The Framing Effect of Price Format

Keywords: by Marco Bertini & Luc R. Wathieu

11 Dec 2006
Research & Ideas

Fixing Price Tag Confusion

The price tag is evolving. It wasn't long ago that potential buyers had only to contemplate a single figure on a price tag—Mattress $799. But increasingly consumers are being... View Details

Keywords: by Sean Silverthorne; Retail

16 Jan 2015
News

Price Protection Report: Credit Cards Shielding You From Price Drops

2009
Working Paper

Altruistic Dynamic Pricing with Customer Regret

By: Julio J. Rotemberg

A model is considered where firms internalize the regret costs that consumers experience when they see an unexpected price change. Regret costs are assumed to be increasing in the size of price changes and this can explain why the size of price increases is less... View Details

Keywords: Inflation and Deflation; Price; Marketing; Consumer Behavior; Mathematical Methods

07 Jul 2022
News

Are Online Prices Higher Because of Pricing Algorithms?

March 2022 (Revised March 2024)
Case

Hometown Foods: Changing Price amid Inflation

By: Julian De Freitas, Jeremy Yang and Das Narayandas

During the early part of the 2021 Covid-19 pandemic, Hometown Foods, a large seller of flour-based products, thrived as consumers hoarded baked goods and took up baking to pass the time and find comfort. Then, amid growing shortages in commodities, a vaccine arrived,... View Details

Keywords: COVID-19 Pandemic; Consumer Behavior; Supply Chain; Inflation and Deflation; Spending; Price Bubble; Price; Volatility; Food and Beverage Industry

22 Jul 2002
Research & Ideas

Is Performance-Based Pricing the Right Price for You?

Because pricing is such a difficult and complex arena, it has confounded sales and marketing executives and scholars for centuries. In no other marketing element is the two-sided conflict and cooperation nature of the buyer-seller... View Details

Keywords: by Benson Shapiro; Manufacturing

December 2010
Article

Altruistic Dynamic Pricing with Customer Regret

By: Julio J. Rotemberg

A model is considered where firms internalize the regret costs that consumers experience when they see an unexpected price change. Regret costs are assumed to be increasing in the size of price changes and this can explain why the size of price increases is less... View Details

Keywords: Cost; Price; Change; Inflation and Deflation; Cost Management; Customers; Practice; Announcements; Forecasting and Prediction

Find at Harvard

20 Sep 2004
Research & Ideas

How Consumers Value Global Brands

serves as a rationale for global brands to charge premiums. Global brands "are expensive, but the price is reasonable when you think of the quality," pointed out a Thai participant. Consumers also... View Details

Keywords: by Douglas B. Holt, John A. Quelch & Earl L. Taylor

February 1987 (Revised January 1989)
Case

SmithKline Consumer Products: The Contac Relaunch

In March 1986, a tamperer contaminated CONTAC Cold Capsules, SmithKline Consumer Product's most popular product. To relaunch CONTAC after withdrawing it from the market, the management team had to present a plan of action to the corporation board. They knew CONTAC's 25... View Details

Keywords: Safety; Crisis Management; Product Launch; Pharmaceutical Industry