A Study On Behavioral Price Under Knightian Uncertainty

Price is a field of study suitable for economics,marketing,finance,and behavioral psychology.The determination of prices is not only the core issue of the company,but also the core issue of the entire economy.Therefore,prices in many fields have been extensively studied.This study has studied prices from a marketing perspective in an effort to enhance the understanding of consumer price behavior,a topic called "behavioral price".Behavioral price helps to explain phenomena that cannot be done by traditional price theory based on microeconomic principles;behavioral price studies are crucial for price management because the design of higher pricing decisions and pricing strategies has an immediate impact on profits.Cheng and Monroe(2013)clearly put forward that behavioral price is "price" rather than "pricing",but the subject of behavioral price has not formed a unified main line,which restricts the in-depth development of behavioral price theory.Therefore,this study reviews consumer processing of price information and related literature on consumer behavior.Using the ISI Web of Science database as a data source,a combination of traditional literature review and bibliometric analysis methods,with the help of Citespace software,focuses on reviewing and discussing literature on behavioral prices published by the top 20 marketing journals.The purpose of this study is to conceptualize research on behavioral prices based on previous literature,identify research topic networks,and discuss authors,research institutions,and academic journals that are prolific in the field,providing the main line for further research.As the new pricing mechanism in the market continues to evolve,new changes have taken place in the relationship between consumers,prices and retailers,there is an urgent need to develop new theories to explain the new relationships between consumers,prices and retailers.This section refers to Bayesian learning theory,a dynamic decision-making method for Knight's uncertainty,and proposes a theoretical framework to explain how consumers respond to uncertain pricing information in commodity purchasing decisions;The Bayesian approach responds to uncertain price information.the dependent variable is the willingness to pay,and uses advertising as the source to provide consumers with static price information advertisements and dynamic image advertisements to promote the shopping process.The model theory assumes that consumers use Bayesian updating to modify the previous perceived price distribution.The exposure of dynamic image ads can reduce the willingness to pay estimates;however,the interaction between anchor prices and dynamic image advertisement information creates an estimated deviation of willingness to pay.Then,using Becker,DeGroot and Marschak(BDM)mechanisms,we designed a real purchase decision experiment for intangible products,expanded the behavioral pricing theory limited to daily grocery products,and tested the model hypothesis theory using experimental data.The experimental results were consistent with the model hypotheses.Bayesian learning involves collecting and interpreting external information to effectively judge prices and generate consumer behaviors.This study introduces Bayesian learning theory,restores the consumer learning process,and explores the mechanism of perceived price and uncertain quality information on consumer learning and its decision making through two-stage experiments.The Bayesian learning theory assumes that the consumer's learning mechanism in Knight's uncertainty decision-making process is verified by providing eye tracking experiments of dynamic advertising information.The results show that under Knight's uncertainty,consumers perform irregular Bayesian learning based on different perceived price levels in different information state spaces;belief changes follow first-order Markov learning rules;Bayesian Learning is a dual system process.Overall,the results support the belief integration principle of the Bayesian learning model.In the Bayesian learning process,consumers are mostly in imperfect information and are always making uncertain decisions.However,due to the limited ability,time,and energy of people to acquire and process information,emotional heuristic judgments are often used in decision-making.This study designed a Bayesian learning EEG experiment with behavioral price formation that simulates the dynamic process of Bayesian updating and surprises,combining uncertainty product quality information with perceived price levels and exploring the influence of factors on consumer price perception with the accumulation of information.We use ERP to record Bayesian updating and predict unexpected brainwave components.ERP results show that uncertainty product quality information expands the perception of negative emotions at high prices.Specifically,perceived high prices under uncertainty and deterministic information result in significant amplitudes of LPP compared to perceived low prices;compared to deterministic information,the amplitude of LPP induced by perceived price levels under uncertainty information is also significantly higher With the accumulation of information,emotions in the price judgment(willingness to pay)in the Bayesian renewal stage are less pervasive than in the predictive surprise stage,and the willingness to pay is positively related to the LPP amplitude deflection(for example,a high level of willingness to pay raises more deflection amplitude).The dual-system theory describes two fundamentally different ideologies involved in information processing and integration.Intuition systems are responsible for emotional,rapid and automatic rapid processes,while rational systems are responsible for slower processes that are more analytical,rational,speedy,and computational.The former system is also referred to as system 1,and the latter system is often referred to as system 2.This paper combines the dual system theory(cognition and emotion)to provide a dynamic analysis of the simultaneous effects of cognition and emotion in the process of behavioral price formation.Experimental research based on real consumer experience shows that in the context of perceiving high prices,the accumulation of information has an impact on the adjustment range of willingness to pay for different emotional consumers but not significant;in the context of perceived low prices,information accumulation will The adjustment range of willingness to pay for consumers with different emotions has a significant effect,that is,those who have negative emotions have lower willingness to pay than those who have positive emotions.This shows that with the accumulation of information,the influence of cognition on the willingness to pay increases with time,and emotions also decrease Moreover,these effects are attenuated by inconsistent target experiences.Finally,studies show that the adjustment of willingness to pay explained by both cognition and emotion tends to be stable as information accumulates.