Economics Insights @ CBS

We describe a model examining how a firm might choose the package size and price for a product that deteriorates over time. Our model considers four factors: (1) the usable life of the product; (2) the rates at which consumers use the product; (3) the relation between package size and the variable cost of the product; and (4) the minimum quantities consumers seek to consume for each dollar they spend (we call these reservation quantities). We allow heterogeneity in the usage rates and reservation quantities for the consumers.

The present studies aimed to extend Regulatory Fit Theory in the domain of persuasive communication by (a) using printed advertisement images without any verbal claim, instead of purely or mostly verbal messages; (b) selecting the images to fit the distinct orientations of regulatory mode rather than regulatory focus; and (c) priming regulatory mode orientation instead of relying on chronic prevalence of either locomotion or assessment orientation.

Although there is a good deal of speculation surrounding the role of pharmaceutical innovation in late 20th century mortality improvements in the United States, there is little empirical evidence on the topic and there remains a good deal of doubt regarding whether pharmaceuticals matter at all for mortality.