Application Research On Modeling And Pricing Based On Loss Aversion

This paper mainly studies the optimal pricing strategies adopted by monopoly firms when dealing with different types of customers,among which loss-averse customers are the focus of the study.Through the method of mechanism design,this paper studies the optimal pricing and optimal order quantity of merchants in order to obtain the maximum profit when the market demand is uncertain.The impact of product quality on merchants’ sales profits.In the face of loss-averse customers,sellers in the insurance market can distinguish customers in various ways,such as mixed menus and separate menus,and adopt different pricing menus for customers with different levels of loss aversion.In addition,loss-averse customers may also have two situations:bundled and unbundled.Under the condition of personal equilibrium of customers,a monopoly can formulate pricing strategies to achieve the Pareto optimality of the whole society.