Competitive Price-Cutting Momentum and Pricing Reactions

Author(s): Joel E. Urbany and Peter R. Dickson

Source: Marketing Letters, Vol. 2, No. 4 (Nov., 1991), pp. 393-402
Published by: Springer
Stable URL: http://www.jstor.org/stable/40216234
Accessed: 14/06/2010 01:44

Your use of the JSTOR archive indicates your acceptance of JSTOR's Terms and Conditions of Use, available at
http://www.jstor.org/page/info/about/policies/terms.jsp. JSTOR's Terms and Conditions of Use provides, in part, that unless
you have obtained prior permission, you may not download an entire issue of a journal or multiple copies of articles, and you
may use content in the JSTOR archive only for your personal, non-commercial use.

Please contact the publisher regarding any further use of this work. Publisher contact information may be obtained at
http://www.jstor.org/action/showPublisher?publisherCode=springer.

Each copy of any part of a JSTOR transmission must contain the same copyright notice that appears on the screen or printed
page of such transmission.

JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of
content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms
of scholarship. For more information about JSTOR, please contact support@jstor.org.

Springer is collaborating with JSTOR to digitize, preserve and extend access to Marketing Letters.

http://www.jstor.org
 Letters2:4, (1991):393^402
Marketing
© 1991KluwerAcademicPublishers, intheNetherlands.
Manufactured

Competitive
Price-Cutting and
Momentum
Reactions
Pricing
JOEL E. URBANY*
ofSouthCarolina
University

PETER R. DICKSON
OhioState University

Keywords:Price-Cutting
Momentum
(PCM), PricingReactions

[May 1991]

Abstract
In lightoftheincreasinginterest
inunderstandingthebehavioralsideofcompetitivedecisionmak-
ing,thispaperexamineshowthe"price-cutting momentum" (PCM) createdbyothercompetitors'
reactionsto an initiator's
pricecut influences
pricingdecisions.We explorethePCM construct
and presenttheresultsofa studyexamining theeffectof PCM on thepricerecommendations of
retailgrocerypricingexecutives.WefindthatPCM influences reactionsinbothlow-search
pricing
andhigh-search markets. Competing oftheresultsareconsidered.
explanations

The difficulty of modelingoligopolisticcompetitiveinteractionhas traditionally

led to a focus on certaintractableaspects of the oligopolyproblemto the exclu-
sion of more descriptivework whichexamines actual response tendencies(Jos-
kow 1975; Kadane and Larkey 1983; Rao 1984; Hauser 1984; Eliashburg and
Chatterjee1985; Bonoma, Crittenden,and Dolan 1988; Kreps 1990). In addition,
recentresearchresultssuggestthat optimizingmodels of competitivedecision-
makingmay not be descriptivelyaccurate in lightof gaps between seller beliefs
about consumerbehaviorand actual consumerbehavior (Urbany,Dickson, and
Key 1990; Hoch 1988; Parasuraman,Berry,and Zeithaml 1985) or potentialde-
cision framingeffectswhich conventionaleconomic theorymay not account for
(e.g., Urbanyand Dickson 1990; Kahneman and Tversky 1979). This suggestsa
need for descriptivework which examines actual competitivereactions. In an
attemptto advance the studyof sellerdecision-making, we considerherea poten-
tial behavioralinfluenceon pricingbehavior: the pressurecreated by a competi-
tor's price cut, which increases as other competitorsfollow suit. We call this
concept price-cutting momentum.Below we describe its relevance, alternative

*Theauthorsacknowledgethefinancialsupportof the Departmentof SponsoredProgramsand

Researchat theUniversity
of SouthCarolinaand theCraneProfessorship
at theOhio State Uni-
versity.
394 JOEL E. URBANY AND PETER R. DICKSON

hypothesesfor its effecton pricingbehavior, and the resultsof an experiment

examiningsuch effects.

/./. Price-cuttingmomentum

Price wars typicallybegin withthe action of one firmattemptingto gain market

share (O'Conner 1986). While reactionsto an initiator'sprice cut may varyfrom
industryto industry(Simon 1982), it is reasonable to assume thata competitor's
price cut creates pressure on the currentprice point inertia (DeSarbo, Rao,
Steckel, Wind and Colombo 1987). We defineprice-cutting momentum(PCM) as
the downwardprice pressurethat is created by a competitor'sprice cut, which
thenbuilds as additionalcompetitorsfollowtheinitiator.Search theoryfromeco-
nomics provides a basis fora generalhypothesisregardingthe effectof PCM on
price-setting.
Information economics models (Stigler1961; Salop and Stiglitz1977; Wildeand
Schwartz 1979; Tellis and Wernerfelt1987) suggestthatPCM will motivatea firm
to lowerits prices because it will believe thatits searchingcustomerswilldiscover
the competitiveprice dispersionand shiftpatronage.That is, the segmentof con-
sumers who are active shoppers are seen to police the market,discoveringand
reactingto competitiveprice differentials. Centralto the theoryis thenotionthat
the seller's pricingdecision will be a functionof his perceptionof how large that
active search segmentis (see Wilde and Schwartz 1979; Salop and Stiglitz1977).
When the segmentof shoppers is relativelysmall, prices may remaindispersed
(Wilde and Schwartz 1979). Hence, we should observe that PCM has a greater
influenceon a seller's pricingwhen consumersearch is highthanwhen it is low.
Anotherway of saying this is that price-settersshould be more immuneto the
pressurecreated by price-cutting momentumin a low search market:

Hypothesis:PCM will significantly reduce thereactingfirm'spricesin a market

in whichthe majorityof consumersactivelycompareprices (i.e., highsearch).
In a marketin which a minorityof consumers actively compare prices (low
search), PCM will have a less significantor non-significant
effect.

There is reason, however,to suspect thatPCM may have a significant effectin

a low search marketas well as in a highsearch market(Urbany 1985). Evidence
fromconsumereconomics (Boynton,Blake, and Uhl 1983),forexample,suggests
that price wars may be driven by competitor-focused decision-makingwithout
accurate evaluationof consumerbehavior.PCM may generatea pressureto sim-
ply conformto or imitatecompetitors'actions (cf. Alchian 1950; Kotler 1991).
Related to this, a "herd behavior" mentalitymay exist in which followingthe
competitionrepresentsa relativelyrisk-free(i.e., morejustifiable)decision com-
pared to takinga more independentstance (Scharfsteinand Stein 1990). In addi-
tion, the prospectof losing even a small numberof customersto a competitor's
price-cuttingmay weigh heavily on the decision-maker(Urbany and Dickson
COMPETITIVE PRICE-CUTTING MOMENTUM AND PRICING REACTIONS 395

1990;KahnemanandTversky1979).Thesefactorssuggestthefollowing
alterna-
tivehypothesis:

Alternative PCM willsignificantly

Hypothesis: reducethereacting
firm'sprices
inbotha low searchanda highsearchmarket.

2. Method

2.1. Theparticipants

Respondents inthestudywerea nationwide sampleof199executivesresponsible

forpricingdecisionsintheretailgroceryindustry.Executiveswereidentified us-
ingan industrytradedirectory(TheDirectoryofSupermarket, Grocery,and Con-
venienceStoreChains,New York:BusinessGuides,Inc.). Namesandcompanies
wererandomly sampledfromthedirectory in an attempt to obtaina nationally
representativesample.For each firmselected,the executivewithprimaryre-
forpricing
sponsibility decisionswas identified
ina telephonescreening and then
contacteddirectly.Those who agreedto participate (over 90 percentof those
called)wereaskedto lookfortheresearchmaterials (a case studyand question-
naire)in themailthefollowing week. Responsewas encouragedby a drawing
amongrespondents whowerewillingto return thequestionnaire withtheirbusi-
nesscardsforeight$100cash prizes.Of720 case studiesmailedforthisportion
ofthestudy,199(28 percent)werereturned.1

2.2. Thecase study

The case studyusedintheresearchwas patterned afterthecompetitive situation

in an actual market.Industry the
executiveswereconsultedto critique case,
whichwas thenpretested on a sampleof MBA studentsand supermarket man-
agers.The resultingfeedbackledtofurther revisionsthat made the scenariomore
realistic
andfamiliar to themanagers.
As pricingmanager forOURSTORE (a disguisedretailgrocery chain),respon-
dentswereaskedto recommend pricesfora groupofeightproductsforthecom-
ingweek. It was explainedthatOURSTORE's majormarkethadjust been at-
tackedbya relatively smallsharecompetitor (FEISTY) withan aggressive price
cutting The
campaign. competitive stores inthe market (disguisedas "Anytown,"
although respondents weretoldthecase was basedon an actualmarket)wereall
retailoperations.The competi-
describedin thecase as fairlysimilarfull-service
tivesituationwas constructedtorepresent market
a typicaloligopolistic structure
withone firma clearmarketleader.The information in table1 was providedto
thesubjects.
The price-cuttingmoveinitiated byFEISTY was firstdescribedas a promotional
396 JOEL E. URBANY AND PETER R. DICKSON

TableI . Typicaloligopolistic
market

Chain Numberofstores Shareofanytownmarket(based on total$ volume)

LEADER 25 40 percent
OUTSTORE 16 23 percent
OPPONENT 16 22 percent
FEISTY 6 10percent
All others - 5 percent

blitzwhichbegantwoweeksearlier.FEISTY's current pricesforeightrelatively

highturnproductswerepresented, alongwiththepricesof thesameitemstwo
monthsearlier,whenall storeshad similarprices.The case thendiscussedwhat
was knownaboutthegroceryshoppingbehaviorof consumersin theAnytown
market.Resultsfromrecentconsumersurveysconductedbya "majoruniversity
and an industry
organizationbothlocatedin Anytown"werereported.The re-
sponsesof LEADER and OPPONENT to FEISTY 's pricecuts werethende-
scribed.

2.3. Experimental
design

The experiment consistedofa 4 x 3 designin whichinformation

aboutcompet-
itorresponseto FEISTY's pricecutsand consumersearchactivityweremanip-
ulated.The manipulationstookthefollowing form:

2.3.1. Price-cutting
momentum (PCM). Therewerefourlevelsofthismanipulation.
The case reportedthateither(1) bothLEADER and OPPONENT had decided
not to followFEISTY's price cuts, (2) OPPONENT had cut its prices but
LEADER hadnot,(3) LEADER hadcutitspricesbutOPPONENT hadnot,and
(4) bothLEADER andOPPONENT hadcuttheirpricesinresponseto FEISTY's
initiative.
This informationwas detailedby listingthenew pricesof thesecom-
petitorsalong side FESITY's new prices. Effectively,
thismeantthatOUR-
STORE faceda marketwherecompetitors for10percent,
accounting 32 percent,
50 percent, or72 percentofthemarket (as measuredbysalesvolume)werecharg-
ingthenewlowerprices.The variability ofpriceswas hencegreaterwhenonly
OPPONENT or LEADER followFEISTY. Therewas verylittledifference in
pricevariability (computedbyweighting priceby share)betweenthesetwocon-
ditions:themajordifference betweenthemwas whether or notthemarketleader
maintained or lowereditsprices.

2.3.2. Consumer searchbehavior

(CS). Therewerethreelevelsof thismanipula-
tion.The case reportedthat10,25, or 75 percentofconsumers
inAnytownwere
activepricecomparison shoppers.
COMPETITIVE PRICE-CUTTINGMOMENTUM AND PRICING REACTIONS 397

2.4. Selection ofproductsand prices

The numberof productswas limitedto eightto reduce the complexityand length

oftheexercise. Frequentlypurchased,highturnitemswere selectedbecause they
would be key candidatesforprice cuts in a competitiveretailenvironment.The
price list in the case presentedthe executives withthe prices of OURSTORE,
LEADER, and OPPONENT two monthsbeforeand two weeks afterFEISTY's
everyday-low-price campaign began. The beforeprices were based on industry
normalprices. These were varied slightlyamong the fourcompetitorsto add re-
alism. FEISTY's new prices were set to providea strongchallengeto the major
supermarkets.They were 10 to 20 percentbelow the before-pricesof the other
threecompetitors,withone exception. The price of Coke was cut by 33 percent
to matchits typicalspecialled price at the timeof the study.In the competitive
reaction (PCM) treatmentsin which LEADER and/orOPPONENT followed
FEISTY's price cuts, theirprices were set to be nearlyidenticalto FEISTY's,
again witha few penniesdifference forsome productsto maintainrealism.
The questionnairefirstasked subjects to recommendretailprices forthe eight
products.They thenexplained theirpricingdecisions and respondedto a struc-
turedquestion thatattemptedto establishtheirlong-termpricingstrategy.They
finallyanswereda series of Likertquestions whichmeasuredtheirbeliefsabout
themarketdescribedin thecase. These measuresservedas manipulationchecks.

3. Results

Whilethe originaldesignprovidedforthreelevels of the consumersearch manip-

ulation,no significant (p > .10) werefoundbetweenthe 10% and 25%
differences
comparisonshopperconditionson any of the manipulationchecks or the recom-
mendedpricebasket. Consequently,these two conditionswerecollapsed, leaving
unequal sample sizes in the remainingeightcells (two consumersearch levels by
fourcompetitiveresponselevels).

3.1. Dependent variable and experimentalmodel

We use Lisrel (Joreskogand Sorbom 1984) to model the effectsof respondent

perceptionsregardingconsumersearch and PCM on recommendedprice basket
(the sum of all eightrecommendedprices) (Bagozzi 1977). Figure 1 depicts the
experimentalmodel examined. The manipulationsare representedwith dummy
variables (one forthe consumersearch manipulationand threeforthe PCM ma-
nipulation).The perceived "consumer search" and "price-cuttingmomentum"
constructsare in effectmanipulationchecks. The consumer search perception
was indicatedby fouritems (alpha = .80); the PCM perceptionby threeitems
(alpha = .84) (see Figure 1 forthe items). Constructreliabilitiesand variances
398 JOEL E. URBANY AND PETER R. DICKSON

Consumer ^^ ^\
Search . . X Perceived X
588 Consumer \
Manipulation: (
CS ►( Info
J
\. 34.6% y

/ Recommended \
I Basket Price
J
- \. 13.6% y
PCM1
I ^
^^^
IX .381 ^?
NT "23V^
>v /^^ Perceived ^\
\X Price-Cutting \
-625 1 Momentum
PCM2 j
1 618%
y^V ^^^
s
Competitor ^
.921/
Response /
Manipulation: I ' Chi-Square = 80.68
1/ =
PCM3 <M- 57
p = .021
AGFI = .917
RMSR = .080
are significant.
NOTE: Allpathcoefficients
Numbersin percentagesare variancesexplained.

Figure1. Experimental
modelofpricingreaction.

extracted(Fornell and Larcker 1981) are all in acceptable ranges (.81 and .52,
respectively,forperceivedconsumersearch; .84 and .63 forperceivedPCM).
The resultsin Figure 1 indicatean overall acceptable fitforthe simpleexperi-
mentalmodel (AGFI = .92, RMSR = .08), althoughthe chi-squareis significant
(Chi-square {57 d.f.} = 80.68, p = .021). All model paths are significant,sup-
portingthe manipulationsand the expected negativeeffectsof both perceived
consumer informationand perceived PCM on pricingrecommendations.The
crossover paths fromthe consumersearch manipulationdummyvariable to the
perceivedPCM constructdo not improvemodel fitsignificantly (incrementalchi-
square improvement= 0.18, 1 d.f., p > .05). Likewise, the competitivereaction
dummyvariables do not influenceperceivedconsumerinformation (incremental
chi-squareimprovement= 1.33, 3 d.f., p > .05).
COMPETITIVE PRICE-CUTTINGMOMENTUM AND PRICING REACTIONS 399

To test the hypotheses,the relationshipbetween PCM and the recommended

pricebasket (representedby a singlebeta coefficient)was modeled separatelyfor
the low and highconsumersearch groups. A group analysis indicatedno differ-
ence in path significanceor model fitwhen comparingthe low and high search
groups.The model whichfullyconstrainsall indicatorand path coefficientsto be
equal across the two groupsproduces a nonsignificant chi-square(chi-square{45
d.f.} = 30.46, p = .952). When the betas forthe low and highsearch groups are
allowed to differ,the resultingimprovementin chi-squareis nonsignificant (chi-
square {1 d.f.} = 0.37, p > .05). Under low search, the simple PCM -* Price
Basket model fitsthe data (Chi-square{17 d.f.} = 14.68, p = .619), and 9.7 per-
cent of the variance in the price basket is explained. The beta coefficientrepre-
sentingtheeffectof PCM on pricebasket is - .311 (p<.05). The significant down-
ward trendin prices (endingup 4 percentabove FEISTY's basket price) can be
observedin themeans presentedin table 2. The basket price in the most extreme
competitiveresponseconditionis $.65 (5.2 percent)lowerthanin the conditionin
which FEISTY only has cut price. Further,the largest drop in recommended
prices occurred($.44) when the LEADER made its move, suggestingan impor-
tantinfluenceof the marketleader's reactionon pricingbehavior.
The model also fitsfor the high search group (Chi-square {17 d.f.} = 10.79,
p = .867), again showing a significanteffectof PCM on the price basket

checks
andmanipulation
Table2. Meanpricerecommendations

responseto FEISTY's pricecut

Competitive

Opponent F-value
No one Opponent Leader and leader (3,124
follows follows follows follow d.f.)

FEISTY's CurrentBasket
Price $11.26 $11.26 $11.26 $11.26
LOW SEARCH CONDITION
n 35 28 33 32 -
Mean Recommended
BasketPrice $12.41 $12.30 $11.86 $11.76 6.31a
InfoScoreb -.33 -.41 -.23 -.32 0.29
PCMScorec -.88 -.19 .16 .83 45.19b
HIGH SEARCHCONDITION
n 16 17 18 20 -
Mean Recommended Basket
Price $11.96 $11.71 $11.76 $11.70 0.41
InfoScore8 .41 .75 .49 .58 1.64
PCM Score' -.90 -.10 .41 .68 21.53b

ap < .05.
perceivedconsumerinformation.
scoreacross4 itemsmeasuring
bMeanstandardized
cMeanstandardized
scoreacross3 itemsmeasuring momentum.
perceivedprice-cutting
400 JOEL E. URBANY AND PETER R. DICKSON

(beta = -.211, p<.05). However,notethatthepricesapparently hitsomething

ofa competitive inthiscondition,
floor2 dropping only$.27(2.3 percent)between
theextremecompetitive responseconditions.It appearsthatrespondents in the
highsearchconditionwereswifter to respondto FEISTY's pricecuts,thusre-
ducingthepossibleeffect ofPCM. In sum,thesignificanteffectsofPCM inboth
thelow and highsearchconditions supportthealternativehypothesis.

4. Discussion

The resultsindicatethatPCM influences pricingreactionseven in a marketin

whicha minority ofconsumers are saidto be activecomparison shoppers.Inter-
estingly,the PCM manipulation did not lead respondents to believethatcon-
sumerswouldincreasesearchintheshort-term3 (see table2). Wecannotruleout
thepossibilitythatrespondents cutpricesinpartbecausetheyusedcompetitors'
behaviorto updatetheiruncertain priorsaboutconsumerbehavior,anticipating
an eventualincreasein searchand pricesensitivity in responseto pricecompeti-
tion(Salop and Stiglitz1977).It is interesting,
however, thatthesignificant effect
of PCM was independent of respondents'short-term perceptions of consumer
search.
An additionalexplanationof thereactionsfromthelow searchgroupis that
respondentsexhibitedan immediateimitativeor conforming response(e.g.,
"herd" behavior)to the pricecuttingwithoutextensiveconsideration of con-
sumersearchbehavior.Thisexplanation is consistentwiththeresearchofBoyn-
tonetal. (1983)andHanssens(1980),whoobservedthatcompetitors' actionsand
reactionsmayinfluence a firm'sbehaviorevenwhensuchactionsand reactions
havelittleor no effecton consumerbehavior.
Futureresearchcouldpitthesetwoexplanations againstone another.For ex-
ample, the "uncertainty" hypothesis that
(suggesting PCM signalsare used to
formmorecertainexpectations aboutconsumerbehavior)wouldpredictthatad-
ditionalinformation aboutthe marketshareconsequencesof competitor price-
cuttingwould reduce uncertainty and, therefore, wouldinfluence pricingdeci-
sions.On theotherhand,the "imitative" hypothesis (whichsuggeststhatPCM
encouragescompetitive conformity) would predicta weaker (orno) effectofsuch
additionalinformation on pricingbehavior.4 Otherissuesofinterest includefur-
therexamination of the marketshareleader'sabilityto deter/encourage price
competition, the influence of different consumerresearchsourceson decision-
making, and theimpactofvarying competitive conjectures on price-setting.

Notes

I. Individualfirmcharacteristics
werenotobtainedfromrespondents.
2. One explanationforthisis thatFEISTY's "new" pricesin thecase studywerebelowOUR-
COMPETITIVE PRICE-CUTTINGMOMENTUM AND PRICING REACTIONS 401

STORE'S unitcostforfourof theeightproducts.Thiswas a resultofsettingFEISTY's prices

to be noticeably
differentfromthepreviousmarketnorm.These low priceswoulddeterprice-
cuttinginboththelowand highsearchconditions and so do notaffectourconclusions.
3. In explainingtheirpricingrecommendations,only4 of 199respondents (all 4 in thelow search
condition)mentioned thatpricesensitivity
wouldlikelyincrease.
4. We wouldliketo thanka reviewer forsuggestingthishypothesis.

References

Alchian,ArmenA. (1950). "Uncertainty, Evolution,and EconomicTheory,"JournalofPolitical

Economy58 (3), 211-221.
Bagozzi,RichardP. (1977). "Structural EquationModelsin Experimental Research,"Journalof
Marketing Research14,209-226.
Bonoma,ThomasV., VictoriaL. Crittenden, and RobertJ. Dolan. (1988). "Can We Have Rigor
and Relevancein PricingResearch?"In Timothy Devinney(ed.), Issues inPricing:Theoryand
Research.Lexington, MA: LexingtonBooks.
Boynton,RobertD., BrianF. Blake,and Joe N. Uhl. (1983). "RetailPriceReporting Effectsin
Local Food Markets,"AmericanJournalofAgricultural EconomicsFebruary, 20-29.
DeSarbo,WayneS., VithalaR. Rao, JoelH. Steckel,Jerry Wind,and RichardColombo.(1987).
"A FrictionModelforDescribingand Forecasting PriceChanges,"Marketing Science 6, 299-
319.
Eliashburg, Jehoshua,and RabikarChatterjee.(1985). "AnalyticalModels of Competition with
ImplicationsforMarketing: Issues,Findings,andOutlook,'*JournalofMarketing Research22,
237-61.
Fornell,Claes, andDavid F. Larcker.(1981)."EvaluatingStructural EquationModelswithUnob-
servableVariablesand Measurement Error,"JournalofMarketing Research18,39-50.
Grocer'sSpotlight.(1984)."Predatory Pricing?Or IntenseCompetition?" February,1.
Hanssens,Dominique.(1980). "MarketResponse,Competitive Behavior,and TimeSeries Anal-
ysis,"JournalofMarketing Research17,470-485.
Hauser,JohnR. (1984)."PricingTheoryandtheRoleofMarketing Science,"JournalofBusiness
57(1), s65-s71.
Hoch,StephenJ.(1988)."Who Do We Know:Predicting theInterestsandOpinionsoftheAmer-
icanConsumer,"JournalofConsumerResearch15,315-324.
Joskow,Paul. (1975). "FirmDecision-making Processesand OligopolyTheory,"AmericanEco-
nomicReview65, 270-279.
Joreskog, KarlG., and Dag Sorbom.(1984).LISREL VI: AnalysisofLinearStructural Relation-
shipsbyMaximumLikelihoodand Least Squares Methods.Chicago:NationalEducationRe-
sources.
Kadane, JosephB., and PatrickD. Larkey.(1983). "The Confusionof Is and Oughtin Game
TheoreticContexts,"ManagementScience29, 1365-1383.
Kahneman,Daniel,and AmosTversky.(1979). "ProspectTheory:An AnalysisofDecisionunder
Risk,"Econometrica 47, 263-291.
Kotler,Philip.(1991).Marketing Management: Analysis,Planning,Implementation, and Control.
EnglewoodCliffs:PrenticeHall.
Kreps,David M. (1990).A CourseinMicroeconomic Theory.Princeton, NJ:Princeton University
Press.
OXonner,MichaelJ.(1986)."WhatIs theLogicofa PriceWar?"International TrendsinRetailing
3, 15-21.
Parasuraman, A., ValarieA. Zeithaml,and LeonardBerry.(1985). "A ConceptualModel of Ser-
vice Qualityand Its ImplicationsforFutureResearch,"JournalofMarketing 49, 41-50.
402 JOEL E. URBANY AND PETER R. DICKSON

Rao, Vithala R. (1984). "Pricing Research in Marketing:The State of the Art," Journalof Business
57, s39-s60.
Salop, Steven, and Joseph Stiglitz. (1977). "Bargains and Ripoffs: A Model of Monopolistically
CompetitivePrice Dispersion," The Review of Economic Studies 44(3), 493-510.
Scharfstein,David S., and JeremyC. Stein. (1990). "Herd Behavior and Investment,"American
Economic Review June,465-479.
Simon, Hermann. (1982). "PRICESTRAT: An Applied StrategicPricingModel forNondurables,"
TIMSIStudies in the Management Sciences 18, 23-41.
Stigler,George J. (1961). "The Economics of Information,"Journalof Political Economy 69, 213-
225.
Sutton, Howard. (1990). The MarketingPlan in the 1990s. New York: The Conference Board.
Tellis, Gerard J., and BirgerWernerfelt.(1987). "Competitive Price and Quality underAsymmetric
Information,"MarketingScience 6, 240-253.
Urbany,Joel E., and Peter R. Dickson. (1990). "Prospect Theory and PricingDecisions," Journal
of Behavioral Economics 19, 69-80.
Urbany, Joel E., and Rosemary Key. (1990). "Actual and Perceived Consumer Vigilance in the
Retail Grocery Industry,"MarketingLetters 2(1), 15-25.
Urbany, Joel E. (1985). "A Study of Seller Pricing Behavior," Research Proposal, Universityof
South Carolina.
Weitz, Barton A. (1985). "Introductionto Special Issue on Competitionin Marketing,"Journalof
MarketingResearch 22, 229-236.
Wilde, Louis L., and Alan Schwartz. (1979). "Equilibrium Comparison Shopping," The Review of
Economic Studies 46 (3), 543-554.