Commentary on "Pricing Prototypical Products"

Marketing Science, Forthcoming

16 Pages Posted: 26 Jun 2024

See all articles by Shichang Li

Shichang Li

School of Management, University of Science and Technology of China

Jingchuan Pu

University of Florida - Warrington College of Business Administration

Quan Zheng

University of Science and Technology of China - School of Management

Date Written: June 20, 2024

Abstract

The article by Amaldoss and He [Amaldoss W, He C (2013) Pricing prototypical products. Marketing Science. 32(5): 733-752.] investigates how prototypicality changes the competitive behavior of firms in a horizontally differentiated market. Their study extends the spokes model by considering the asymmetry between the prototypical and nonprototypical products in terms of the probabilities of being included in consumers' consideration sets. Their analyses show that when consumer valuations are low (moderately high), the prototypical product charges a lower (higher) price than a nonprototypical product. However, the asymmetric probabilities are overlooked when characterizing the demand for the prototypical product. With the correct demand function, we show that whether the prototypical product is priced lower depends on consumer valuations as well as the level of prototypicality, and the prototypical product can charge a lower price even when consumer valuations are moderately high. One should use extra caution when characterizing demands in the spokes model with asymmetric probabilities.

Suggested Citation

Li, Shichang and Pu, Jingchuan and Zheng, Quan, Commentary on "Pricing Prototypical Products" (June 20, 2024). Marketing Science, Forthcoming, Available at SSRN: https://ssrn.com/abstract=4871451 or http://dx.doi.org/10.2139/ssrn.4871451

Shichang Li

School of Management, University of Science and Technology of China ( email )

Hefei, Anhui
China

Jingchuan Pu

University of Florida - Warrington College of Business Administration ( email )

Gainesville, FL 32611
United States

Quan Zheng (Contact Author)

University of Science and Technology of China - School of Management ( email )

Hefei, Anhui
China

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