Pre-Sale Competition When Consumers Regret

Abstract

This paper takes consumers anticipated regret into consideration in the pre-sale competition decision model, and analyzes the impact of anticipated regret on retailers’ pre-sale price and revenue in the pre-sale context where consumers have uncertain valuations and preference matching. The results show that, for retailers with higher probability of matching, it is expected that anticipated buying regret is harm to improve revenue, while anticipated waiting regret is beneficial. Conversely, for the retailer with lower possibility of matching, anticipated buying regret is beneficial to improve revenue, while waiting regret is not.