and the anonymous JMR reviewers for their helpful comments. Social needs play an important role in the purchase of conspicuous goods. In this article, the authors extend traditional economic models to accommodate social needs, such as desire for uniqueness and con-formism, and examine their implications for pricing conspicuous goods. First, in the context… (More)
C onsumers purchase conspicuous goods to satisfy not only material needs but also social needs such as prestige. In an attempt to meet these social needs, producers of conspicuous goods like cars, perfumes, and watches, highlight the exclusivity of their products. In this paper, we propose a monopoly model of conspicuous consumption using the rational… (More)
for their helpful comments. We are especially grateful to the late journal editor, Dick Wittink, for inviting and encouraging us to undertake this review. Dick was a great supporter of inter-disciplinary research. We hope this review can honor his influence and enthusiasm by spurring research that spans both marketing and behavioral economics.
R eference groups influence product and brand evaluations, especially when the product is a publicly consumed luxury good. Marketers of such luxury goods need to carefully balance two important social forces: (1) the desire of leaders to distinguish themselves from followers and (2) the countervailing desire of followers to assimilate with leaders. In this… (More)
We explore issues in theory-driven choice modeling by focusing on partial-equilibrium models of dynamic structural demand with forward-looking decision-makers, full equilibrium models that integrate the supply side, integration of bounded rationality in dynamic structural models of choice and public policy implications of these models. There are at least… (More)
I n several marketing contexts, strategic complementarity between the actions of individual players demands that players coordinate their decisions to reach efficient outcomes. Yet coordination failure is a common occurrence. We show that the well-established psychological phenomenon of asymmetric dominance can facilitate coordination in two experiments.… (More)
M ixed strategies are widely used to model strategic situations in diverse fields such as economics, marketing, political science, and biology. However, some of the implications of asymmetric mixed-strategy solutions are counterintuitive. We develop a stylized model of patent race to examine some of these implications. In our model two firms compete to… (More)
Some luxury goods manufacturers offer limited editions of their products while some others market multiple product lines. Researchers have found that reference groups shape consumer evaluations of these product categories. Yet little empirical research has examined how reference groups affect the product line decisions of firms. Indeed, in a field setting… (More)