Marketing Letters

, Volume 2, Issue 4, pp 393–402

Competitive price-cutting momentum and pricing reactions

  • Joel E. Urbany
  • Peter R. Dickson
Article

Abstract

In light of the increasing interest in understanding the behavioral side of competitive decision making, this paper examines how the “price-cutting momentum” (PCM) created by other competiors' reactions to an initiator's price cut influences pricing decisions. We explore the PCM construct and present the results of a study examining the effect of PCM on the price recommendations of retail grocery pricing executives. We find that PCM influences pricing reactions inboth low-search and high-search markets. Competing explanations of the results are considered.

Key words

Price-Cutting Momentum (PCM) Pricing Reactions 

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Copyright information

© Kluwer Academic Publishers 1991

Authors and Affiliations

  • Joel E. Urbany
    • 1
  • Peter R. Dickson
    • 2
  1. 1.University of South CarolinaUSA
  2. 2.Ohio State UniversityUSA

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