Price threholds: assesment model for competitive bidding

Abstract

Academic interest in price thresholds has increased over the last decades. Consequently research and professional papers in this area have been rising. The exuberance in approaches to this subject can generate confusion about terms and definitions: terms are defined in different senses or are used with different meanings. Even when psychological threshold are crucial to understand client’s price perception, we are not able to find global theoretical models. This paper analyzes on the state of the art, by reviewing the most the most significant contributions in academic literature of the last five decades. Based on our review we define six thresholds within a general model, including the main variables that determine all of them. Finally, we will discuss some research and practical consequences for both academics and practitioners. We conclude with limitations and future research in this area.