Factor price

About: Factor price is a research topic. Over the lifetime, 2764 publications have been published within this topic receiving 86176 citations.

Does Hedonic Price Indexing Change Our Interpretation of Economic History? Evidence from Swedish Electrification

Abstract: Rapid price decreases for ICT products in the 1990s have been largely attributed to the introduction of hedonic price indexes. Would hedonic price indexing also have had large effects on measured price and productivity during earlier technological breakthroughs? This article investigates the impact of hedonic and matched model methods on historical data for electric motors in Sweden from 1900–35. The results show rapidly decreasing prices in the industry producing electric motors in the 1920s. However, the price decreases of electric motors in the 1920s were not on a par with price decreases for ICT equipment in the 1990s, even if hedonic indexing is used.

The Components of Total Perceived Price

Abstract: The key to improving pricing methods lies in establishing a clear relationship between the price paid by customers and the value received. A company's understanding of how a decision in its pricing policy will affect the perceptions its potential consumers will have of these prices, is fundamental if it wishes to make sure that its offer is properly perceived. Thus, if companies identify the rules used by purchasers to price their products, they will be successful in getting the objective signal they send via their communication strategies to be perceived in the desired manner. This analysis shows that both monetary and non-monetary costs are considered by consumers when determining the final cost perception associated with the acquisition of a good, and that the understanding of the internal reference price is essential for determining the nominal price effect on the monetary component of total sacrifice.

Price and Customers’ Perceptions of Value

Abstract: This chapter summarizes the behavioral pricing research findings of price and how buyers respond to price. This includes the relationship between price and perceived value and the decision heuristics that help us understand how price influences perceptions of value and eventual product choice. Buyers also use price as an indicator of product quality, and customers’ perceptions of quality, benefits, and value affect how they will respond to a purchase situation. In addition, buyers’ perceptions of the sacrifice affect the purchase decision, that is the degree that consumers reflect on the amount that they would “give up” by paying the monetary price for a product may vary according to a variety of situations and conditions, such as type of product or service, or the perceived unfairness of the price, or if the buyer perceives a brand is superior to competing brands. The chapter also discusses how buyers trade off or compare the perceived gains arising from price-quality judgments versus the perceived sacrifice required to acquire the product or service, including whether buyers integrate price and other attribute information following a nonlinear (proportional) or linear (subtractive) process. It also summarizes research on price as a multidimensional attribute, considered with additional dimensions such as warranty coverage, and warrantor reputation. Finally, the chapter examines perceived product value as being decomposed into its (1) perceived acquisition value (the expected benefit to be gained from acquiring the product less the net displeasure of paying for it) and (2) perceived transaction value (the perceived merits or fairness of the offer or deal).