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Dynamic quality policies with reference quality effects

Abstract : Dynamic pricing policies with reference-price demand have been intensely analysed. Less studied are dynamic quality policies with reference-quality demand. This article studies the dynamic quality policy of a firm whose consumers use a reference point in their decision-making, in line with the principles of behavioural economics. More specifically, I consider reference quality formation in an optimal control setting. By solving on the basis of Pontryagin’s maximum principle, I obtain analytical solutions to the optimal quality policy. The managerial implications of quality reference for dynamic quality policy are discussed.
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Contributor : Elisabeth Lhuillier Connect in order to contact the contributor
Submitted on : Tuesday, January 16, 2018 - 6:32:48 PM
Last modification on : Thursday, November 4, 2021 - 11:58:07 AM




Régis Chenavaz. Dynamic quality policies with reference quality effects. Applied Economics, Taylor & Francis (Routledge), 2017, 49 (32), pp.3156 - 3162. ⟨10.1080/00036846.2016.1254345⟩. ⟨hal-01685879⟩



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