Speaker: Haitao Cui, assistant professor of marketing fromUniversityofMinnesota.

The following website is his brief introduction,

//www.csom.umn.edu/Page6286.aspx

Topic: The Benefit of Uniform Price for Branded Variants

Time: 1:30-3:00 PM, Nov 26, 2008

Location: Room 217,GuanghuaBuilding2

Welcome to attend!

Abstract:The extensive adoption of uniform pricing in retailing industry is puzzling given the fact that retailers may improve their profitability through the use of variable pricing to exploit the difference in differentiated products' demand characteristics. In the paper, we incorporate consumers' fairness concerns about firms' price fairness into a Bertrand model to investigate how firms make pricing decisions when competing for fair-minded consumers. We show that in a wide range of parametric values, firms will adopt uniform pricing strategies in equilibrium. Yelling for price fairness, however, may not be a blessing for fair-minded consumers since the uniform pricing, induced by consumers' concerns of price fairness, may mitigate price competition and increase equilibrium prices, which in turn will increase firms' profits and let consumers pay for their concerns of price fairness.

The paper also shows that under some conditions neither firm has incentives to unilaterally maneuver consumers into believing that it is “fair” for the firm to charge non-uniform prices. This is because the bene