Incorporating Behavioral Anomalies in Strategic Models
Marketing Letters, Vol. 16, Nos. 3/4, pp. 361-373, 2005
13 Pages Posted: 11 Jun 2007 Last revised: 25 Jul 2013
Date Written: 2004
Behavioral decision researchers have documented a number of anomalies that seem to run counter to established theories of consumer behavior from microeconomics that are often at the core of analytical models in marketing. A natural question therefore is how equilibrium behavior and strategies would change if models were to incorporate these anomalies in a consistent way. In this paper we identify several important and generalizable anomalies that modelers may want to incorporate in their models.We briefly discuss each phenomenon, identify a key unresolved issue and outline a research agenda to be pursued.
Keywords: marketing strategy, game theory, reference dependence, fairness, confirmatory bias
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