TY - JOUR
T1 - Pricing Strategy for GM Food
T2 - Impact of Consumer Attitude Heterogeneity and GMO Food Labelling
AU - Li, Rong
AU - Basu, Amiya K.
N1 - Publisher Copyright:
© 2019, Springer Science+Business Media, LLC, part of Springer Nature.
PY - 2020/8/1
Y1 - 2020/8/1
N2 - We consider how a marketer of a GM food product should price it in response to the requirement of GMO food label in the near future and its effect on consumers’ heterogenous attitude. We examine how the GM food pricing is affected by different consumer attitudes toward GM-food (Like, Uninformed, and Dislike), the GMO food labelling to be enforced, and price competition. On the one hand, the GM food seller should expect to raise price after the GMO food labelling to cover the additional cost incurred on labelling. On the other hand, the seller may need to reduce price after labelling as the Uninformed consumers’ attitude may change and become negative once the labelling is available. The tradeoff of these two effects yields interesting results. For example, we find that a monopolist GM food seller may choose to charge a high price, i.e., charge a premium for the GM-traits, and maintain at this price even after the labelling is enforced. Managerial implications and future research directions are discussed.
AB - We consider how a marketer of a GM food product should price it in response to the requirement of GMO food label in the near future and its effect on consumers’ heterogenous attitude. We examine how the GM food pricing is affected by different consumer attitudes toward GM-food (Like, Uninformed, and Dislike), the GMO food labelling to be enforced, and price competition. On the one hand, the GM food seller should expect to raise price after the GMO food labelling to cover the additional cost incurred on labelling. On the other hand, the seller may need to reduce price after labelling as the Uninformed consumers’ attitude may change and become negative once the labelling is available. The tradeoff of these two effects yields interesting results. For example, we find that a monopolist GM food seller may choose to charge a high price, i.e., charge a premium for the GM-traits, and maintain at this price even after the labelling is enforced. Managerial implications and future research directions are discussed.
KW - Consumer attitude towards GM food
KW - GM food
KW - GMO Food Labelling
KW - Pricing
UR - http://www.scopus.com/inward/record.url?scp=85060985057&partnerID=8YFLogxK
UR - http://www.scopus.com/inward/citedby.url?scp=85060985057&partnerID=8YFLogxK
U2 - 10.1007/s10479-019-03154-w
DO - 10.1007/s10479-019-03154-w
M3 - Article
AN - SCOPUS:85060985057
SN - 0254-5330
VL - 291
SP - 463
EP - 474
JO - Annals of Operations Research
JF - Annals of Operations Research
IS - 1-2
ER -