REFLECTION

Conclusion:

- I think the stimulus-organism-response (S-O-R) model broadens the economic black

design pattern and assists us in comprehending how pricing affects business activity.
- Based on what I have understood, with the aid of behavioral science, many price
occurrences that seem illogical or unreasonable from a strictly economic standpoint may
be explained and provide recommendations for practical pricing policies.
- In addition to being the price a characteristic of low value. Some parts of the price-
response function may have an upward slope since it might also convey status or
operate as a measure of quality. In these circumstances, the price elasticity is positive.
- The utility of gains and losses are assumed by prospect theory to be asymmetrical. The
loss value exceeds the gain value in absolute terms because of loss aversion. The layout
and communication of pricing and price structures are impacted by this disparity.
- The premise of mental accounting is that customers categorize things and respond to
pricing differs depending on the category.
- When consumers have little time to gather or study information, or when they have little
interest (low participation) in the goods, they frequently employ rubrics or other
strategies to simplify their price selections. Many phenomena, including the magic of the
middle, price threshold effects, price anchor effects, and assortment effects, are derived
from these behaviors and have significant ramifications for pricing control.
- The study of pricing and their impact on the brain is still quite young. This field has
shown that prices trigger the brain's pain center, and The Psychology of Price shows that
how a price is presented may significantly affect a consumer's choice to make a
purchase.
- The range of behavioral pricing studies has been highlighted in this chapter. These fresh
perceptions have already had a significant impact on the economy. We anticipate further
innovations to materialize. Customer behavior cannot be fully described by the classical
theory's underlying rationality hypothesis of Homoeconomicus.
- Numerous behavioral science findings are unexpected and first seem irrational.
However, they perform a better job than traditional economic models in simulating
consumer behavior. For pricing management, this has a wide range of tangible and
particular repercussions. However, we advise caution because many data were obtained
under circumstances that were very dissimilar from the average purchase decision.
- The findings' potential for generalization is not fully understood. However, we do
anticipate further significant findings from this field of study. Price management should
not only adhere to the principles of classical economics but also take behavioral science
into consideration.