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Adamantios Diaman t opoulos European Business Management School, University of Wales, Swansea, U K and Brian P. Mathews University, Middlesbrough, U K INTRODUCTION Ever since Hall and Hitch (1939) challenged the profit-maximization principle of conventional (i.e. neoclassical) price theory, the question of how firms specify their pricing objectives has remained a subject of controversy in the pricing literature. In essence, this controversy centres around two interrelated issues, concerning (1) the type of pricing objectives pursued by firms and (2) the desired level of attainment associated with such objectives. With regard to the former, the major debate has been whether profit is the only (or overriding) objective underlying pricing decisions or whether other goals are of greater relevance/importance. With regard to the latter issue, attention has focused on the extent to which the actual specification of pricing objectives takes a maximizing or satisficing form. For some 30 years, the microeconomic literature was dominated by heated discussions on these questions (for relevant reviews, see Machlup, 1946, 1967; Bain, 1949; Lieberman, 1969; Boulding, 1942, 1960; Papandreou, 1952; Von Mering, 1954; Haldi, 1958; Maxcy, 1968; Horowitz, 1967; Krupp, 1963; Langholm, 1968). Largely as a result of the above debate, a number of
Managerial and Decision Economics – Wiley
Published: Jan 1, 1994
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