behavioral pricing models

Behavioral pricing models analyze how customers' perceptions, emotions, and decision-making behaviors influence their willingness to pay. Unlike traditional models based solely on costs or market rates, these models consider factors like feelings of fairness, urgency, or social status that can shift demand and pricing effectiveness. For example, a limited-time offer can prompt faster purchases due to fear of missing out. By understanding these psychological factors, businesses can set prices that better match customer behavior, increase sales, and improve profitability while maintaining a fair and transparent relationship.