Decision-making in Pricing
: A Seller's Perspective

  • Dominic Bergers

Student thesis: Doctoral Thesis


This PhD by publication thesis provides an insightful exploration into cognitive biases and their profound effects on pricing decisions from a seller's perspective. It underscores the significance of comprehending how individual variances contribute to bias susceptibility, pinpointing five key biases—loss aversion, endowment effect, anchoring and adjustment effect, familiarity bias, and status quo bias—that heavily sway pricing decisions.
In the business context, three elements drive profit: price, sales volume, and cost. Price, as evidenced by Marn and Rosiello (1990), is the most potent, with its impact on profit outstripping volume increases by three to four times. Therefore, errors in pricing have more severe repercussions than other management areas, such as cost optimization. This thesis demonstrates how biased pricing decisions frequently lead to suboptimal outcomes.
The study delves into empirical research, particularly on status quo bias, a key factor in pricing management deficits. It conducts quantitative experiments to investigate how personality traits (e.g., extraversion, conscientiousness, openness) and locus of control influence status quo bias in pricing decisions.
Moreover, the thesis examines factors beyond individual differences, such as self-interest in decision outcomes driven by incentives. Using a mixed-method sequential research approach, it explores how salespeople's status quo bias, especially influenced by previous discount information, affects new sales scenarios. A pivotal discovery is that monetary incentives can mitigate the status quo bias.
An essential aspect of the thesis is its focus on strategies to counteract biased behavior. It reviews and empirically assesses the most effective debiasing techniques in price management, revealing that while organizational professionalism correlates with debiasing strategy usage, individual decision-makers with extensive professional experience are less inclined to use these techniques.
Comprising three primary articles and an additional supplementary piece, this thesis offers profound insights into cognitive biases in management decision-making. It emphasizes the role of individual differences and effective debiasing strategies, enriching our understanding of biases in pricing decisions. This research is particularly pertinent to both scholars and industry practitioners, presenting strategies to mitigate the influence of cognitive biases in business decisions.
In summary, this PhD thesis makes a substantial contribution to price management, addressing cognitive biases, individual differences, and debiasing strategies. It not only enhances academic knowledge but also offers practical insights for industry professionals, highlighting the necessity for strategic management and awareness of biases in business decisions.
Date of Award20 Dec 2023
Original languageEnglish
Awarding Institution
  • University of Portsmouth
SupervisorMahsa Ghaffari (Supervisor) & Giampaolo Viglia (Supervisor)

Cite this