Buy It Now or Later, or Not: Loss Aversion in Advance Purchasing

• Tác giả: Senran Lin
• Ngôn ngữ: eng
• Ký hiệu phân loại: 220.49 Other early versions
• Thông tin xuất bản: 2021
• Bộ sưu tập: Báo, Tạp chí
• ID: 168091

Tóm tắt

This paper studies the advance-purchase game when a consumer has belief-based loss-averse preferences, introducing a novel perspective by incorporating reference updating. It demonstrates that loss aversion increases the consumer's willingness to pre-purchase. Moreover, the paper endogenizes the seller's price-commitment behavior in the advance-purchase problem. The analysis reveals that the seller will commit to his spot price even with no obligation to do so, a behavior previously assumed in the literature.