Year: 2026
Type: article
Abstract: Pre-sale mechanisms are widely used by e-tailers to manage demand uncertainty and stimulate early purchases, yet existing research has largely emphasized economic incentives while giving limited attention to consumers’ psychological responses to early commitment. This study examines how anticipated regret shapes the relative performance of two prevalent pre-sale strategies—advance discounts and deposit expansion—across different market structures. We develop game-theoretic models of monopolistic and duopolistic markets in which consumers anticipate post-purchase regret and incorporate this behavioral concern into their pre-sale decisions. Our analysis shows that deposit expansion consistently attracts higher demand than advance discounts by offering post-decision flexibility, and this demand advantage increases with consumers’ regret sensitivity. However, the profitability implications are non-monotonic. While deposit expansion dominates advance discounts when anticipated regret is low to moderate, advance discounts become more profitable once regret is sufficiently strong. Competition further moderates these effects by amplifying demand differences while compressing profit margins, without altering the regret threshold at which profit dominance reverses.
Source: Mathematics
DOI: 10.3390/math14040692
Authors: Wei Yao, Yudong Li, Yan Chen
Institution: Macau University of Science and Technology
Language: English
Subfield: Management Information Systems
Domain: Social Sciences
Open Access status: gold
Estimated APC paid: $3,137
Awards: G2464110841, G307930236
OpenAlex ID: W7129110765
FWCI:
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