In the Research Paper, "Personalized Dynamic Pricing of Limited Inventories

question 30

Essay

In the research paper, "Personalized Dynamic Pricing of Limited Inventories" by Aydin and Ziya, published in Operations Research, Vol. 57, No. 6, pp. 1523-1531 (2007), 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:

Efficacy

The ability of a product or treatment to produce a desired effect under ideal and controlled conditions.

Placebos

Inactive substances or treatments used in controlled experiments to test the efficacy of therapeutic interventions, serving as a control group to the active treatments.

Headache Monitoring

The systematic tracking of headache occurrence, intensity, and duration to aid in diagnosis and treatment planning.

Relaxation Therapies

Techniques or practices designed to reduce stress and anxiety, thereby promoting physical and mental well-being; examples include meditation, deep-breathing exercises, and progressive muscle relaxation.