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We return to the problem that motivated the original behavioral theory of the firm, price adjustment, but from the standpoint of post-Carnegie School perspectives on cognition, attention, and routines. Whereas work in the Carnegie School tradition has tended to develop models of firms in opposition to economic theory, we seek to understand how economic ideas are used to shape decision processes. Using a combination of interview, observational, and archival data gathered at a large manufacturing firm that produced parts to maintain machinery, we develop a behaviorally plausible story of how organizations shape price adjustment. We follow three successive waves of managers seeking to improve the pricing routines through shifting attentional perspective, managing attentional engagement, and structuring attentional execution. We demonstrate how managers redesign routines to shape cognition and attention, thereby developing greater coherence in the market representations of the sales force. Our findings show how reshaping cognition and attention in pricing routines can improve organizational intelligence in pricing decisions. Economists treat markets as the ideal – the best that can be imagined – and organizations as second-best options – the best that can be achieved, but our findings invert the story, suggesting that in modern market economies, organizations and routines are essential to making the price system work.

The general theory of behavioral strategies includes a set of propositions supporting alternative configurations of objectives, contextual features, and beliefs/assessments by executives. The theory includes the outcomes of selections of specific decision alternatives. Building behavioral-strategy models in contexts enriches one or more goals of science and practice: description, understanding, prediction, and influence/control. This chapter is a primer to the general theory. A brief review of relevant empirical studies supports the general theory. The empirical studies include the use of alternative data collection and analytically tools including true field experiments, think aloud methods, long interviews, statistical hypothesis testing, ethnographic decision tree modeling, and building and testing algorithms (e.g., qualitative comparative analysis, QCA). The general theory is the blending of cognitive science, economics, marketing, psychology, and implemented practices in explicit contexts. Consequently, behavioral-strategy theory is distinct from context-free microeconomics, market-driven, and competitor-only decision-making. Capturing and reporting contextually driven alternative routines to strategy setting by a compelling set of propositions represents what is particularly new and valuable about the general theory. The general theory serves as a useful foundation for advances theory and improving the practice of implemented strategies.

Explores suitable ways of modifying cost‐plus pricing policies in the context of marketing based theory. Reports the findings of a research project concerned with the procedures followed in the pricing of consumer durables, and attempts to formulate an alternative statement of pricing behaviour to the cost‐plus theory. Recounts that an empirical study was made among 17 firms in the industry, ranging from smaller organisations manufacturing relatively simple electrical heating apparatus to the industry's larger firms manufacturing washing machines, refrigerators and spin dryers. Summarises that it is hoped the marketing approach to pricing, outlined there and in the accompanying table, will assist in developing sound marketing theory.

The nature and extent of our knowledge of stock market efficiency are examined. The development of “efficiency”, as a way of thinking about stock markets, is traced from Roberts (1959) and Fama (1965) onward. The early work successfully introduced competitive economic theory to the study of stock markets and paved the way for a flood of empirical research on the relation between information and stock prices. This literature irreversibly altered our views on stock market behavior. The theory and evidence of seemingly‐rational use of information lay in sharp contrast to prior beliefs. It was associated with a widespread increase in respect for stock markets, financial markets, and markets in general, at the time. Researchers began developing and using a variety of formal models of security prices. Nevertheless, “efficiency” has its limitations, both theoretically (as a way of characterizing markets) and empirically (by stretching the quality of the data, the estimation techniques used, and our knowledge of price behavior in competitive markets). Extensive evidence of anomalies suggests either that the market systematically misprices securities or that the theoretical or empirical limitations are binding, or both. The less interesting research question now is whether markets are efficient, and the more interesting question is how we can learn more about price and transactions behavior in competitive stock markets. The concept of an “efficient stock market” has stimulated both insight and controversy since Fama (1965) introduced it to the financial economics literature. As a construct, “efficiency” models the stock market in terms of the reaction of prices to the flow of information. Like all theory choices, modelling the market in this fashion involved tradeoffs. The benefits included opening the literature to an abundance of high‐quality researchable data, covering a variety of information, and the resulting insights obtained on the role of information in setting prices. The opportunity costs included temporarily closing the literature to alternative ways of viewing stock markets, for example by modelling public information as a homogenous good and thus ignoring factors such as differences in beliefs among investors, differences in information processing costs, and the “animal spirits” that might drive group behavior. The costs also included reliance on particular asset‐pricing models of how an “efficient” market would set prices. Not surprisingly, the ensuing deluge of research has produced some startling evidence, for and against the proposition that financial markets are “efficient”. Strongly‐conflicting views and puzzling anomalies remain. The early evidence seemed unexpectedly consistent with the theory. The theory, and its implications, also seemed clear at the time. After a period that seems short in retrospect, the growing body of evidence in favor of the efficient market hypothesis emerged as one of the most influential empirical areas of economics. Fama's (1970) review described a flourishing, coherent and confident literature. This research had an irreversible effect on our knowledge of and attitude toward stock markets, and financial markets generally. It coincided with an emergence of interest in, and respect for, all markets among economists and politicians, and influenced the worldwide trend toward “liberalizing” financial and other markets. The research consistently appeared to show an unbiased reaction of stock prices to public information. The property of “unbiased reaction” to public information, which formed the basis of the early definitions of “efficiency”, was seen to be an implication of rational, maximizing investor behavior in competitive securities markets (Fama 1965, p.4). Reduced to a basic level, the reasoning was that any systematicallybiased reaction to public information is costlessly publicly observable, and thus provides pure profit opportunities to be competed away. Characterizing the market in terms of its reaction to information is only one of many feasible ways of modelling stock price behavior, but it introduced economic theoryto the empirical studyof stock prices, which had received little serious attention from economists prior to that point. Despite the subsequent spate of anomalies, the early efficiency literature not only adapted standard economic theoryto provide the first formal economic insights into how stock prices behave, but it helped pave the way for an outporing of theoretical and empirical work on stock markets and capital markets in general. Subsequent empirical research was not as consistent with the theory. Evidence of “anomalous” return behavior now is widespread and well‐known. It generallytakes the form of variables (for example, size, day‐of‐the‐week, P/E ratio, market/book value ratio, rank of scaled earnings change, dividend yield) that are significantly but inexplicablyrelated to subsequent abnormal stock returns. Much of this evidence has defied rational economic explanation to date and appears to have caused many researchers to strongly qualify their views on market efficiency. Disagreement has not been not confined to the evidence. The literature has produced a variety of research designs, ranging from the “market model” of Fama, Fisher, Jensen and Roll (FFJR, 1969) to Shiller's (1981a,b) variance‐bounds tests. The very term “efficiency” has engendered controversy: there is a modest literature on precisely what efficiency means, on the role of transaction costs, and on whether efficient markets are logically feasible. Making sense of this literature requires careful definition of “efficiency” in this context and careful analysis of the type of evidence that has been offered in relation to it. This involves an assessment of the strengths and weaknesses of both the theory of efficient markets, as a way of characterizing stock markets, and of the data and research designs used in testing it. Not surprisingly, a mixed conclusion emerges. While the concept of efficient markets was an audacious departure from the comparative ignorance and suspicion among economists of stock markets that preceded it, and provides valuable insights into their behavior, the concept has its limitations, in terms of both its internal logical coherence and its fit with the data. Section 1 ofthis survey sketches the development of the efficient market theory, reviewing the principal contributions in terms of their usefulness in guiding and evaluating empirical research. Section 2 addresses the limitations inherent in what is knowable about stock market efficiency, given the present state of theory about how security prices might behave in an “efficient” market. It argues that there are binding limitations in the theoryof asset pricing, some of which are known and others of which are unknown or even unknowable. These limitations must be borne in mind when choosing whether to interpret the data as evidence of: (1) market efficiency, under the maintained hypothesis that a specific research design, including a specific model of asset pricing used to benchmark price behavior, correctly describes pricing in an efficient market; or (2) the ability of our models and research designs to encapsulate how prices behave in an efficient market, under the maintained hypothesis of efficiency. Against this background, section 3 then provides an assessment of the accomplishments of the theory of stock market efficiency, including an interpretation of the evidence. It focuses on the nature and influence of the evidence and does not attempt to provide a comprehensive literature taxonomy. The final section offers conclusions. The principal conclusion is that the theory of efficient markets has irreversibly enhanced our knowledge of and respect for stock markets (and perhaps for all financial market or even for markets in general) but that, like all theories, it is fundamentally flawed.

The study aims to investigate how attribution theory in the context of pricing strategies can help tourism destinations recover from the negative impacts of the COVID-19 pandemic.

The study adopted a qualitative research design using semi-structured interviews to address the lack of research in this area. Interview participants included tourists and tourism customers. The interview responses were then analyzed using “Nvivo” qualitative data analysis software to identify critical themes regarding applying attribution theory to pricing strategies.

The findings revealed that tourists prefer bundled and hedonic pricing strategies that integrate the service providers' pricing strategies' locus of control, stability and controllability. Tourists do not favor dual pricing strategies unless the reasons for price controllability or stability are justified. Tourists also prefer the controllable pay-what-you-want pricing strategy. Although tourists accept dynamic pricing, certain conditions related to price locus, stability and controllability must be met.

The research shows tourists prefer pricing strategies that give them control and flexibility, like bundled packages and pay-what-you-want models. Service providers should integrate pricing strategies that transparent costs and justify price fluctuations. While dynamic pricing is accepted if necessitated by external factors, tourists are wary of unnecessary price changes. Providers can build trust and satisfaction by explaining pricing rationale and offering controllable options like bundles.

The study contributes to the theory by applying attribution theory to the context of pricing strategies in tourism. It also provides innovative recommendations for tourism managers on how to use pricing strategies after the COVID-19 pandemic. The findings offer new insights that extend beyond previous research.

Economic theory posits a universal sociocultural orientation toward pricing complicated only by systematic cognitive biases. While institutional and organizational theorists have challenged the purported homogeneity of market logics, they have not linked market heterogeneity to price outcomes. If market logics are internally complex with multiple orientations toward pricing, skilled actors should be able to influence prices through market logics. This study utilizes qualitative analysis of interview data with a stratified random sample (75 percent response rate) of key participants to examine how investment banks (underwriters) instantiate a hybrid market logic in the Initial Public Offering (IPO) market. Underwriters exploit their status position to promulgate IPO pricing methods contradicting neoclassical rationality, behavioral models of pricing, and the underwriters’ own calculative mode of behavior. They successfully create this hybrid logic for issuers while hiding the nature of their market power through deceptive use of vocabulary from the market logic itself. Hence, the internal complexity of market logics directly impacts financial prices, with skilled actors achieving superior outcomes. This study concludes with an assessment of the implications for price theory, developing propositions to guide future research on market logics and pricing.

Economic theory posits a universal sociocultural orientation toward pricing complicated only by systematic cognitive biases. While institutional and organizational theorists have challenged the purported homogeneity of market logics, they have not linked market heterogeneity to price outcomes. If market logics are internally complex with multiple orientations toward pricing, skilled actors should be able to influence prices through market logics. This study utilizes qualitative analysis of interview data with a stratified random sample (75 percent response rate) of key participants to examine how investment banks (underwriters) instantiate a hybrid market logic in the Initial Public Offering (IPO) market. Underwriters exploit their status position to promulgate IPO pricing methods contradicting neoclassical rationality, behavioral models of pricing, and the underwriters’ own calculative mode of behavior. They successfully create this hybrid logic for issuers while hiding the nature of their market power through deceptive use of vocabulary from the market logic itself. Hence, the internal complexity of market logics directly impacts financial prices, with skilled actors achieving superior outcomes. This study concludes with an assessment of the implications for price theory, developing propositions to guide future research on market logics and pricing.

Aims to study the pricing decisions of small firms. Conventional wisdom argues that small firms tend to use relatively unsophisticated methods of pricing; however, indicates that small firms may in fact be a good deal more sophisticated in their techniques of pricing than has previously been supposed. Reviews the theory and empirical evidence to date and notes a significant gap in the research into small business pricing. Using a case study method based on 12 detailed cases of the pricing policies of small companies, concludes that there is little evidence to support the findings of previous studies which indicated the predominance of full‐cost pricing. It was found that small companies avoided “head‐on” competition and sought to exploit their own market niche as a means of exercising more control over their prices.

This article aims to address the relationship between price strategies and price‐setting practices. The first derive from a normative tradition in the pricing literature and the latter from a descriptive tradition. Price strategies are visible in the market, whereas price‐setting practices are hidden behind the boundaries of an organization.

The study deals with the relationship between price strategies and price‐setting practices that refer to the use of customer value, competition, and cost information. Hypotheses are tested on survey data on 95 small and medium‐sized manufacturing and service firms in The Netherlands.

The results show that price strategies and price‐setting practices are related because strategies are implemented through price‐setting practices. However, some firms do not pursue any of the strategies indicated by pricing theory, some firms engage in practices for no clear strategic reasons, and some firms insufficiently engage in appropriate practices to implement their strategic choices.

The results are limited to small companies. Researchers should examine why firms may not pursue any price strategy that is offered by pricing theory. They may also focus on organizational learning and pricing capabilities.

Managers need greater awareness about the price strategies they can use, should be cautious about a potential mismatch between price strategies and price‐setting practices, and should reassess whether their firms are capable of engaging in the appropriate practices.

Linking price strategies to price‐setting practices reduces conceptual confusion in the pricing literature and may help to specify the gap between pricing theory and practice.