Pricing Beyond the 'Homo Oeconomicus': Expensive Mistakes and Profitable Opportunities in Pricing Research

Florian Bauer

Price optimisation is the most efficient lever to maximize profits but all classical price research tools fail to deliver optimal results as they still assume consumers to behave like a "Homo Oeconomicus".

Pricing Beyond the 'Homo Oeconomicus': Expensive Mistakes and Profitable Opportunities in Pricing Research

Florian Bauer

INTRODUCTION

It's undoubtedly paradoxical that when German dairy farmers protested in front of bottling plants and chain stores in 2008 and demanded higher prices for producers, the majority of consumers were right behind them, even though this solidarity meant that they would ultimately have to pay more for their milk. Some dairies are nowadays even using the fact that their product is, for example, 10 cents dearer to conduct successful advertising campaigns, whilst naturally reassuring people that this money goes straight to the farmers (see...

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