Research On Retailer Pricing Decision Based On Prospect Theory And Consumers’ Behaviors

Nowadays, with the development of the Internet electronic business, the consumers will analyze the market and learn the strategy of the retailers when buying products. Different consumers have different willingness to pay for the same product. Therefore, with the face of the smarter consumers, how to maximize the retailers’profits become an urgent research for many scholars and business.Firstly, consumer behavior and Prospect Theory academic researches and related theories were for basic overview. Secondly, the types of consumers in the market were assumed to be myopic consumer and forward-looking consumer. And analyze the impact of different types of consumer to the retailers’sales strategy, which explore how to decide the full price and the discount price to enable retailers’ desired benefits.At the same time, introduces Prospect Theory which is the core theory of behavioral economics to combine economics and psychology. In the study of economic behavior of the decision maker to explore preferences and risk attitudes as psychological factors. Based on the analysis of different types of consumers’ buying behavior, combined with the basic model of Prospect Theory, to explore in different psychological reference points the final gain or loss of the retailers. The introduce of Prospect Theory is a new view of the research, not only from a different point of view to explain the impact of the consumers to the retailers, but also provides a new way of thinking for the further study.