To read this content please select one of the options below:

The impact of cognitive style, entrepreneurial attitudes and gender on competitive price responses

Hooman Estelami (Gabelli School of Business, Fordham University, New York, New York, USA)
Mohammad G. Nejad (Gabelli School of Business, Fordham University, New York, New York, USA)

Journal of Product & Brand Management

ISSN: 1061-0421

Article publication date: 20 November 2017

678

Abstract

Purpose

While existing research has established various methods for pricing, the impact of a manager’s individual psychological profile on his/her price setting behavior is relatively unexamined. This is especially critical in the context of pricing decisions implemented in response to competitive forces. This paper aims to explore how a manager’s price responses to price cuts by a competitor are affected by his/her cognitive style, gender and entrepreneurial attitudes.

Design/methodology/approach

In the first study, a simulation-based pricing environment is used in a lab setting to capture the dynamics of pricing decisions made in response to competitive price cuts. Participants’ price responses are captured in the form of the magnitude of price change implemented in a simulated environment in response to a competitor’s price reduction. The second study extends the scope of inquiry by using a national sample of business professionals and replicates and reinforces the findings of the first study by capturing participants’ attitudinal response on the decision to reduce prices in reaction to competitive price reductions.

Findings

The results of both studies indicate significant effects for cognitive style, gender and entrepreneurial attitudes. Individuals with stronger entrepreneurial attitudes and analytical cognitive styles, and females are less likely to engage in reactive price reductions.

Research limitations/implications

The findings of this study indicate that managers’ propensity to engage in price changes in reaction to competitors can be linked to their psychological profile and gender.

Practical implications

Given the existence of the relationship between price reactions of managers and their cognitive style and entrepreneurial attitudes, the training and development of pricing professionals may need to take these individual-level factors into account.

Originality/value

This is the first study that has linked managers’ propensity to engage in price changes in reaction to competitors to their gender and psychological profile.

Keywords

Acknowledgements

Both authors have contributed equally to the development of this paper.

Citation

Estelami, H. and Nejad, M.G. (2017), "The impact of cognitive style, entrepreneurial attitudes and gender on competitive price responses", Journal of Product & Brand Management, Vol. 26 No. 7, pp. 759-770. https://doi.org/10.1108/JPBM-05-2016-1189

Publisher

:

Emerald Publishing Limited

Copyright © 2017, Emerald Publishing Limited

Related articles