Abstract
Business-to-business pricing research has often focused on developing rational and normative frameworks and models for pricing issues, strategies and tactics. However, there has been less attention given to behavioral models that help us understand the realities of pricing and how managers actually set prices. Specifically, there has been less attention given to the various individual and group influences on the price setting process. We apply insights from a steadily increasing body of literature on behavioral decision making to identify some relevant behavioral issues that may affect managerial price setting processes in business-to-business contexts. We conclude with some implications for theory building and practice and an agenda for future research.
•Managerial price setting processes are examined through insights obtained from behavioral decision making.•Behavioral models of pricing provide realistic understanding of managerial price setting in business-to-business contexts.•Issue understanding, cognitive biases and heuristics are offered as major managerial factors that impact price setting.•An agenda for future research is offered along with managerial suggestions for price setting.
