Limited‐time pricing strategy considering consumer regret under channel competition

Abstract

AbstractThis study constructs a pricing strategy model that considers consumer busyness and low price duration to examine the effectiveness of limited‐time pricing in influencing consumer behavior. The results show that local store can develop a limited‐time promotion strategy to improve profit, and there is an optimal low price duration. As consumer busyness increases, online retailer's profit may decrease, as local store is better able to leverage consumer busyness to enhance competitiveness. Interestingly, when local store lower price, online retailer may actually need to increase price to obtain greater profit from consumers who missed out on store discounts.