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International roaming (IR) makes it possible to conveniently use mobile communication services (MCS) such as MI access abroad without switching providers, devices or subscriber identity module (SIM) cards. To increase the intensity of competition in the intra-European Union market for IR services, customers will be enabled to buy IR voice and MI access services separately from their existing domestic MCS, as of July, 2014. Specifically, for separated international MI services providers can choose from three different charge types (use-dependent, flat and combination of flat and use-dependent). The purpose of this paper is to empirically examine customer preferences regarding these tariff types for separated international MI services.

Six research questions concerning antecedents of tariff type preferences for separated international MI access services are derived from a literature review. They are empirically addressed by analyzing survey responses obtained for a sample of 496 German-speaking MCS users.

Customers who actively seek for IR price information, consider IR services to be useful, exhibit high use intensities of MI services, do not restrict their MI usage when travelling abroad and tend to prefer flat rates to other pricing schemes. In contrast to these rather “active users”, customers favoring strictly use-dependent tariff plans exhibit significantly lower IR price information seeking efforts and comparatively low use intensities of MI services. Pricing schemes with MI allowances are especially liked by customers who are well-informed regarding and satisfied with IR prices, report above average use intensities of MI services, restrict their MI use abroad, are more likely to switch providers and use MCS mainly for job-related purposes.

The study is based on a German-speaking sample, which deviates from the German adult population. Additionally, the analysis is limited to stated instead of behaviorally revealed preferences for cross-border MI tariff types. Price thresholds influencing whether a cross-border MI tariff is entered into a consumer’s relevant set of offerings are not examined.

The research suggests that mobile network operators are well-advised to offer a clearly structured menu of a limited number of tariffs directed to the three profiled customer segments. Notwithstanding the advantages of such a set of rate plans, international MI tariff schemes with a data volume allowance appear to be generally beneficial both from a provider and an end-customer perspective.

To date, little is known about customer preferences concerning the three rate plan categories and on antecedents of such preferences in the field of MI access abroad. The present study takes a first step to narrowing this knowledge gap.

Analyses alternative forms of pricing and pricing strategies of bank payments services and reports the results of an international survey of pricing practices in 11 countries. Makes a distinction between implicit and explicit pricing and, in the context of British banks′ policy of implicit pricing for personal accounts maintained in credit, compares the pricing practice of British banks and those in other countries. Considers how each compares with optimal strategies indicated by the theoretical analysis. Finds that British banks are alone in not making explicit charges for payments services which is sub‐optimal: there is no incentive for customers to economize on their use of current account; this induces behaviour which raises the costs of banks, and there is no incentive for consumers to use cheaper forms of payment media. Implies a structure of cross‐subsidies which is unlikely to be sustainable in a more competitive market environment.

This paper aims to outline a decision process for how consumers choose among two‐part tariffs which consist of a flat fee plus a per unit charge for usage over an allowance. The paper also seeks to examine what types of decision aids help consumers choose lower cost tariffs.

The approach used is two experimental studies.

Most consumers do not choose a tariff by calculating an expected cost because of usage uncertainty. They instead rely on simple comparisons of the overage rate, usage allowance, and flat fee attributes. These heuristics lead to systematic biases, beyond what actual true cost justifies, for favorable comparisons on these attributes. An online calculator improved choice of the lower cost option from 65 percent to 80 percent, yet this increased to 91 percent if people were also forced to consider a range of usage levels.

Consumers struggle to choose the lowest cost tariff, especially with uncertain usage. Consumers should realize the biases in their decision shortcuts and use the presented decision aids. Firms can leverage these biases by offering larger usage allowances (often done) and smaller overage rates (often not done), or correct them with decision aids.

Much work on tariffs assumes consumers calculate a cost, but the authors question this assumption, and show that consumers instead use simple attribute comparisons to deal with uncertain usage. An understanding of the specific heuristic consumers use allows the authors to better account for past effects, predict and establish new effects, and design effective decision aids. Results indicate tariff biases largely result from information processing shortcomings.

Promotional cues related to notions of fair prices or pricing designed to fit consumers’ needs are prevalent for many service offers. The purpose of this paper is to investigate how both customers’ price fairness and idiosyncratic fit perceptions shape their tariff evaluations.

Two experimental studies involving different tariff types and service contexts test the complex interplay of customers’ perceived price fairness and idiosyncratic fit with customer and context characteristics on their tariff evaluations.

Customers judge tariffs drawing on both the perceived price fairness and idiosyncratic fit, driven by the perceived price level of the tariff and the perceived pricing transparency of the firm. Customers’ service usage and consumption goals moderate these effects: heavy users and hedonic consumers indicate lower price sensitivity while focusing more on their transparency perception. The role of perceived price fairness and idiosyncratic fit for tariff choice depends on the tariff/service context; idiosyncratic fit is important when it is incidental (e.g. flat rates) rather than intentional (i.e. customized tariffs) and when customers lack the expertise or confidence to evaluate price fairness such as in the case of relatively new services.

Prior studies focused on either price fairness or idiosyncratic fit and thus cannot fully explain the complex interplay between both in the context of tariff choice. This paper explicates the conditions that affect the relative importance of both concepts and under which incidental offers are better received than premeditated ones.

People can easily track and understand their usage pattern for any content (e.g. movies, games) or service (e.g. card payment, cell phone usage) by using technologies such as the internet and smart phones. When consumers evaluate their past consumption patterns, they may experience two different kinds of regret: content-based or monetary-based. The purpose of this paper is to propose that perceived self-control, defined as the extent to which people believe they can control their usage, plays a moderating role in the tariff-choice process (flatrate vs pay-per-use) for two types of content: vice-based and virtue-based.

Two laboratory experiments were designed to test the hypotheses. There were a total of 200 participants (86 for Experiment 1 and 114 for Experiment 2) who completed the entire experimental process (i.e. stimulus exposure, questionnaire reporting, dependent variable measurement, manipulation of the independent variables, and control checks).

The results of this research provide evidence supporting the role of perceived self-control in tariff preference by showing that preference varies between flat-rate and pay-per-use tariff options. Specifically, virtue-based content users were more likely to prefer the pay-per-use tariff when their perceived self-control was low vs when it was high. In contrast, vice-based content users were more likely to prefer the flat-rate tariff when their perceived self-control was low vs when it was high.

There are three contributions of the present research. First, the authors investigated the effect of content type on tariff preference. Second, the authors suggest that there is a moderating effect of perceived self-control on tariff preference. Third, this study revealed the factors affecting consumers’ perceived self-control.

Economic integration is an agreement among countries in a geographical region or unification of economic policies between different states aiming to reduce and ultimately remove tariff and non-tariff barriers on trade. The fruit of globalization is the tremendous rise of economic integration as globalization loosens barriers among the nations through reduction in cross-border duties and eases trade policies. Trumponomics is defined as the economic policies of US President Donald Trump that prefers high import tariff to bring “America First.” There is a debate among the researchers about the choice between free trade and protection or imposition of tariff. Some of them prefer free trade because during the start of the great depression, the world economy experienced a huge shift toward protectionism. Choice between no-tariff and tariff represents a prisoner’s dilemma situation whereby each player’s best response is to employ tariffs. This results in a sub-optimal outcome for all where the total volume of world trade falls, which is a Nash solution. The present chapter deals with theoretical discussions on trade war and throws light on the developing country’s choice between non-protectionism supported by globalization and Trump’s protectionism.

This study seeks to examine the effect of pricing as a marketing instrument to stimulate word‐of‐mouth (WOM) by comparing the influence of two pricing strategies (i.e. a low‐complexity vs a network‐effects tariff) on the referral behaviour.

Using customer data from a German mobile network operator (including information on customer characteristics, referral behaviour, and service usage), the authors develop a logit model.

Surprisingly, the results indicate that it is the low‐complexity tariff that increases the likelihood of referrals and leads to an overall higher referral activity. Despite the lower referral activity, however, the network‐effects tariff generates higher revenues.

The results show that companies can use pricing schemes to influence referral behaviour and strongly indicate the need of further research on manageable tools to stimulate word‐of‐mouth marketing.

The findings show not only that pricing has an impact on customers' referral behaviour but also that it is the low‐complexity tariffs that trigger referrals. Furthermore, the results underline the importance of considering the monetary value of referrals.

In contrast with many previously conducted studies on customer referrals, the paper explicitly analyses the impact of pricing on referral behaviour and empirically shows that firms are able to actively manage WOM among customers.

Providers of cloud computing storage services (CCSS) charge offers in several unit bundles for a lump sum per bundle. This non-linear pricing approach is known as a bucket-pricing plan (BPP). If a customer exploits the purchased bucket, he/she can opt for the next higher bucket or refrain from further CCSS use. CCSS suppliers are faced with an optimization problem concerning the number of buckets as well as their lower and upper storage volume boundaries. The purpose of this paper is to develop a model, which supports CCSS suppliers in deriving a BPP-structure and which maximizes their profit in varying market constellations.

The authors develop a multi-period model of tariff choice decisions of private customers of CCSS. The model is applied in Monte Carlo simulations to determine profit-maximal tariff structures as a function of different market characteristics such as median demand saturation, demand heterogeneity, average price per storage unit and bucket ceiling allocation (identical size of each bucket within the frame set by the lower and upper overall boundary, varying sizes of the buckets offered, so that the interval between two ceilings consecutively increases for subsequent buckets) and type of a customer’s utility function.

The simulation analysis suggests that demand heterogeneity and average price per unit are the most influential factors for CCSS tariff structure optimization. Price plans with more than two buckets tend to generate higher profits than simple schemes with two buckets only if demand heterogeneity is low and the average price per storage unit is high and/or median saturation level of customers is low.

Despite the popularity of BPP among providers of CCSS for consumers, there is a lack of scholarly modeling work on the profit implications of the number of buckets entailed in a scheme and the size/ceilings of the various buckets on offer. The model suggested in this paper is a first step toward narrowing this research gap.

The purpose of this paper is to evaluate and contrast the welfare effects of free trade agreements (FTAs) and customs unions (CUs) on member and non‐member countries when tariffs of both members and non‐members are endogenously determined. It also aims to provide sufficient conditions under which both types of preferential trade agreement (PTA) are likely to lower tariffs on non‐members relative to that under most favored nation (MFN).

The paper employs a three country Cournot oligopoly model of trade with segmented markets.

It is shown that under symmetry CU members enjoy higher welfare relative to that under an FTA or MFN. Furthermore, the non‐member country gains from the formation of a PTA so long as the PTA's external tariff falls below a certain threshold. However, for FTA members to necessarily gain, their external tariff needs to be greater than this threshold but smaller than twice their MFN tariffs. Outside this tariff range, welfare effects of FTAs are ambiguous in the absence of further assumptions. The paper also isolates sufficient conditions under which a PTA member is less likely to impose a positive tariff on the non‐member relative to that under MFN.

Unlike existing literature, we do no assume demand linearity to obtain our main welfare results and use this assumption only for illustrative purposes. Another contribution of the paper is to provide sufficient conditions under which a PTA member is less likely to impose a positive tariff on the non‐member relative to that under MFN.