Tuesday, October 16, 2012

Firms Pricing Strategies

The NY Times has a nice article on JC Penney's recent change in pricing.  JC Penney's is choosing essentially three pricing points instead of a series of price discounts to sell their products.  What is interesting (and also outside of most economic models) is how customers react to the strategy change, not the price itself.  If customers have preferences on how the prices change, not just on the change in the price, then this will have implications on firms profits.  This sounds more like a marketing issue, and here is an example of how these two fields interconnect.

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