Behavioral Consequences of Dynamic Pricing

Digital technologies are driving the application of dynamic pricing. Today this pricing strategy is used not only for perishable products such as flights or hotel rooms but for almost any product or service category. With dynamic pricing retailers frequently adjust their prices over time to respond to factors such as demand their supply and that of competitors or the time of sale. Additionally dynamic pricing allows retailers to take advantage of a large share of consumers' willingness to pay while avoiding losses from unsold products. Ultimately this can lead to an increase in revenue and profit. However the application of dynamic pricing comes with great challenges. In addition to the technological implementation companies have to take into account that dynamic pricing can cause complex and unintended behavioral consequences on the consumer side.The key objective of this dissertation is to provide a deeper understanding of the impact of dynamic pricing on consumer behavior. To this end this dissertation presents insights from four perspectives. First how reference prices as a critical component in purchase decisions are operationalized. Second how customers search for products priced dynamically differentiated by business and private customers as well as by different devices used for the search. Third whether and how dynamic pricing influences the impact of internal reference prices on purchase decisions. Finally this dissertation demonstrates that consumers perceive price changes as personalized in different purchase contexts leading to reduced perceptions of fairness and undesirable behavioral consequences.