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The Complexity Turn in Behavioral Pricing

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The Complexity Turn

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Abstract

Building behavioral-pricing models-in-contexts enriches one or more goals of science and practice: description, understanding, prediction, and influence/control. The general theory of behavioral strategy includes a set of tenets that describes alternative configurations of decision processes and objectives, contextual features, and beliefs/assessments associating with different outcomes involving specific price-points. This article explicates these tenets and discusses empirical studies which support the general theory. The empirical studies include the use of alternative data collection and analytical tools including true field experiments, think aloud methods, long interviews, ethnographic decision-tree-modeling, and building and testing algorithms (e.g., fuzzy-set qualitative comparative analysis). The general theory of behavioral pricing involves the blending of cognitive science, complexity theory, economics, marketing, psychology, and implemented practices. Consequently, behavioral pricing theory is distinct from context-free microeconomics, market-driven, and competitor-only price-setting. Capturing and reporting contextually-driven alternative routines to price setting by a compelling set of tenets represents what is particularly new and valuable about the general theory. The general theory serves as a useful foundation for advances in pricing theory and improving pricing practice.

Strategy theory has converged on a view that the crucial problem in strategic management is firm heterogeneity—why firms adopt different strategies and structures, why heterogeneity persists, and why competitors perform differently.

(Powell et al. 2011 , p. 1370)

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Authors and Affiliations

  1. School of Marketing, Curtin University, Bentley Campus, South Perth, Australia

    Arch G. Woodside

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Correspondence to Arch G. Woodside .

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  1. Department of Marketing, Boston College, Chestnut Hill, Massachusetts, USA

    Arch G. Woodside

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Woodside, A.G. (2017). The Complexity Turn in Behavioral Pricing. In: Woodside, A. (eds) The Complexity Turn. Springer, Cham. https://doi.org/10.1007/978-3-319-47028-3_4

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