In the Research Paper by Aydin and Ziya,"Personalized Dynamic Pricing

question 133

Essay

In the research paper by Aydin and Ziya,"Personalized Dynamic Pricing of Limited Inventories," Operations Research 57,no.6 (2007):1523-1531,the authors state that research "suggests that personalized pricing is more acceptable to consumers when it is framed as offering tailored discounts from a fixed price." Survey summaries found that "90% of customers found ...personalized pricing unacceptable," but "only 64% of the same customers stated that they would be bothered if other customers got better discount offers than they did." What economic insight are these customers missing about the benefits of price discrimination in any form?

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Definitions:

Current Ratio

A liquidity ratio that measures a company's ability to pay short-term obligations using its current assets.

Ratio Manipulation

Ratio manipulation is the practice of altering financial figures or ratios in a company's financial statements in order to present a more favorable image of its financial health or performance.

Financial Leverage

The use of borrowed funds to increase the potential return on investment, amplifying both gains and losses.

Profit Margin

A financial metric that measures the percentage of revenue that exceeds the costs of goods sold, indicating the efficiency in which a company turns sales into profits.