Connect with us

BizNews

Personalized pricing can backfire on companies, says study

If part of the product’s value depends on how many people are using it, think a social media network or e-commerce platform, not being able to see what others are being charged means consumers are fuzzier about how many people are likely to buy in and join the network.

Published

on

Personalized pricing, where merchants adjust prices according to the pile of data about a consumer’s willingness to pay, has been criticized for its potential to unfairly drive-up prices for certain customers.

But new research shows that the practice can also hurt sellers’ profits.

Consumers commonly experience personalized pricing through digital coupons or other discount offers they receive either as potential customers or after making a purchase. Other recent examples include the practice of “Buy Now, Pay Later” plans that bundles the sale of a product with a subsidized loan, which can offer different prices to different customers based on their willingness to pay, and airlines using artificial intelligence to customize prices for individual airfares.

Companies can tweak their prices according to data about a customer’s digital footprint, including their buying preferences, location, lifestyle and even what kind of digital device and operating system they use—all in pursuit of squeezing maximum profit out of the buyer.

The downside though, says Liyan Yang, a professor of finance and the Peter L. Mitchelson/SIT Investment Associates Foundation Chair in Investment Strategy at the University of Toronto’s Rotman School of Management, is that this practice typically obscures the price information available to other consumers, an important factor in their decision to buy.

When prices are transparent to everyone and they’re low, “you know that on average, more people will be buying,” says Prof. Yang.

But if part of the product’s value depends on how many people are using it, think a social media network or e-commerce platform, not being able to see what others are being charged means consumers are fuzzier about how many people are likely to buy in and join the network.

The upshot? “Consumers are going to spend less,” says Prof. Yang.

The researcher put those ideas under a theoretical microscope when he and former Rotman PhD student Yan Xiong, who is now an associate professor at University of Hong Kong Business School, used mathematics and game theory to model what happens when consumers can’t see what other people are being charged for a network-based product. Their models revealed that a company ultimately charged more when prices were concealed compared to when they were transparent, leading to lower profits.

Luckily for companies, there are workarounds. Using similar modelling, the researchers found that the profit pitfall could be avoided through some kind of corporate commitment or backstop related to keeping prices low even as a company also pursued profits.

That could be done by the company committing to keep prices within a certain range or at least to lowering prices through a corporate social responsibility program, by developing a good reputation among consumers, by initially offering low prices that are transparent to attract consumers with a lower price threshold, or through the use of price caps either mandated by government or voluntarily adopted by the company.

Another option is for a government to require companies to charge the same price to all customers, a strategy promoted in China, the European Union and the United States where personalized pricing practices have become an issue.

While companies typically dislike regulation, Prof. Yang points out that theoretically at least, some form of price restriction may lead to better corporate profits in the end.

 “There are trade-offs,” he says, adding that regulators would have to “gauge precisely” where the limits should be to hit the pricing sweet spot that optimizes profits to the company.

The study appeared in the Journal of Economic Theory.

BizNews

TikTok Shop, Taguig City partner to empower Filipino MSMEs, creators through ‘Unlad Lokal’

Published

on

TikTok Shop has partnered with Taguig City through its Unlad Lokal program to equip local micro, small, and medium enterprises (MSMEs) and grassroots creators with digital tools, skills, and opportunities to grow their businesses and online presence. The partnership advances the city’s goal of building a future-ready economy while supporting national initiatives to promote inclusive digitalization and alternative livelihoods.

Launched earlier this year in collaboration with the Department of Trade and Industry (DTI), Unlad Lokal reflects TikTok Shop’s commitment to nurturing a digitally empowered MSME sector across the Philippines. Since March 2025, the program has trained over 17,000 entrepreneurs across Metro Manila, Pampanga, and Naga. Building on this momentum, TikTok Shop and its partners are now working with local government units, starting with Taguig, to bring e-commerce education and opportunities to more grassroots entrepreneurs and creators across the country.

“TikTok Shop is committed to empowering Filipino entrepreneurs and creators with the skills, tools, and confidence to thrive in the digital economy,” said Franco Aligaen, Marketing Lead for TikTok Shop Philippines. “Through Unlad Lokal, we’re showing how e-commerce can drive inclusive growth, where every Filipino, regardless of background, can turn creativity into a sustainable digital livelihood and take an active role in the country’s digital transformation.”

Empowering Taguigueños through digital innovation and livelihood

Under Unlad Lokal, TikTok Shop and Taguig City will conduct a series of learning, mentorship, and in-app showcase activities to help local MSMEs and creators strengthen their digital presence. The sessions will cover topics such as digital marketing, live selling, and brand storytelling, empowering participants to expand their reach while sustaining online growth.

The initiative also integrates TikTok Shop’s digital commerce ecosystem into Taguig’s existing MSME support programs, ensuring that innovation directly translates into livelihood opportunities. This partnership complements Taguig’s broader digitalization vision by making technology-driven growth accessible to every community.

“In our Probinsyudad, we believe that every small business is a story of perseverance,” said Taguig City Mayor Lani Cayetano. “Many of our local entrepreneurs started from home kitchens, neighborhood stalls, and small online pages. What they often lack is not talent or passion, but access to tools, networks, and digital knowledge. That is why we welcome Unlad Lokal with open arms. It complements our ongoing programs for MSME development, digital literacy, and innovation under the city’s drive toward a future-ready and inclusive economy.”

Strengthening collaboration between the government and digital platforms

TikTok Shop’s partnerships with the Department of Trade and Industry (DTI), the Department of Information and Communications Technology (DICT), local government units, and telecommunications companies like PLDT and Smart Communications, Inc. reflect the growing synergy between the government, private sector, and digital platforms in building an inclusive and future-ready digital economy.

“Programs like TikTok Shop’s Unlad Lokal bring to life our goal of helping small businesses embrace e-commerce while ensuring they grow sustainably and ethically,” said DTI-NCR Division Chief, Rowena San Jose. “We welcome partnerships that combine innovation with responsibility, especially those that enable our MSMEs to reach wider markets and strengthen consumer trust.”

“Digitalization should be inclusive and secure,” said DICT Secretary Henry Aguda. “Collaborations between platforms like TikTok Shop and government institutions are crucial in ensuring that Filipino entrepreneurs, from local artisans to startup founders, are equipped with the knowledge and tools to thrive in a safe, trusted digital environment.”

Equipping entrepreneurs and creators with digital tools nationwide

As Unlad Lokal continues its nationwide rollout to key cities, including Bacolod, Baguio, Cebu, Davao, and Naga, TikTok Shop emphasized that Unlad Lokal is focused on promoting responsible and safe online commerce. Through the program, sellers and creators are educated on best practices related to transparency, ethical selling, and consumer protection, helping to ensure users benefit from a secure digital marketplace.

“Safety is at the heart of our growth strategy,” Aligaen emphasized. “We continue to invest in education, platform safeguards, and partnerships that promote a reliable and transparent digital marketplace for both sellers and shoppers.”

Unlad Lokal is supported by H.B Jewelry, KILY OFFICIAL, Mikana, Oishi PH, Piattos and Vcut (under Universal Robina Corporation), Tiny Buds Baby Naturals, Tummy Tac, and Vitress, who share TikTok Shop’s mission to advance MSME digitalization, enhance digital literacy, and promote responsible online commerce.

Continue Reading

BizNews

Nostalgia is an asset in company acquisitions, so use it

Tailor nostalgia interventions to different employee categories. Workers with knowledge critical to a company’s value benefit most from identity-based interventions, while “cultural carriers” can help bridge old and new organizational cultures through relationship-focused strategies.

Published

on

When companies are acquired, conventional wisdom suggests that employee nostalgia for their pre-buyout days is a problem to be eliminated so workers can more quickly adapt to the new owners’ ways of doing business.

A study published in the journal Strategic Organization led by UC Riverside School of Business professors Boris Maciejovsky and Jerayr Haleblian suggests this thinking is wrong—especially when the new owners want to retain the most talented, productive, and informed workers.

Nostalgia, they found, serves as a comforting and stabilizing force during takeover periods, when employees feel vulnerable, fear losing their jobs, status, or advancement opportunities, and are thus inclined to send out résumés.

“Rather than viewing nostalgia as living in the past, we demonstrate how it serves as a bridge between employees’ pre-acquisition identity and their post-acquisition reality,” explained Haleblian, the business school’s Anderson Presidential Chair in Business. “This temporal bridging is crucial for maintaining organizational commitment during transitions.”

Drawing from psychology research in emotion regulation, social identity, narrative identity, and attachment theories, the study shows nostalgia isn’t mere sentimentality—it’s a powerful tool that helps preserve identity and meaning during disruptive times, said Maciejovsky, an associate professor of management.

“We challenge the prevailing view that nostalgic emotions are maladaptive responses to change,” Maciejovsky said. “Our research shows that nostalgia can transform negative reactions into positive outcomes, thereby mitigating the talent loss that often jeopardizes acquisition success.”

For employees, nostalgia is often triggered by the upheaval of a corporate acquisition that replaces familiar leadership with unfamiliar faces. By understanding these emotions, the authors argue, managers can see that longing for the past is not resistance but a desire to preserve meaning and identity.

The implications are significant in today’s business climate, where acquisitions of startup companies to gain talent and innovations are commonplace—especially in the tech sector, where the strategy is called “acqui-hiring.” Yet retention is poor: in the U.S., 47% of key employees leave within the first year of an acquisition, and 75% within three years, creating a human capital gap that can reduce company value by 10–15%, according to Mentorloop.com.

The study provides practical guidance for managers, outlining two main approaches to support employees during acquisitions. The first involves identity-preserving interventions, such as maintaining familiar company symbols like names, logos, workspaces, and practices. It also includes honoring historical narratives that connect current practices to valued traditions, while ensuring that the missions of the acquiring and acquired companies remain carefully aligned. 

The second approach centers on relationship-focused interventions, which emphasize building strong connections among employees through team-building activities, heritage celebrations, and shared experiences that foster a sense of social connection.

“Companies like American Airlines have successfully used heritage celebrations, featuring paint schemes from acquired airlines like TWA, to honor predecessor companies while facilitating integration,” Maciejovsky said. “These aren’t just feel-good gestures—they’re strategic interventions that tap into nostalgia’s regulatory benefits.”

The study emphasizes tailoring nostalgia interventions to different employee categories. Workers with knowledge critical to a company’s value benefit most from identity-based interventions, while “cultural carriers” can help bridge old and new organizational cultures through relationship-focused strategies.

The study, titled How Nostalgia Facilitates Post-Acquisition Target Employee Retention: An Agenda for Future Research, was co-authored with Tim Wildschut and Constantine Sedikides of the University of Southampton, UK.

The authors call for future research to test the limits of nostalgia in organizational change,  how buyouts differently affect the acquirer and target employees, and how nostalgia impacts other life changes.

“Transparency about change is important, but so is understanding how emotions like nostalgia can be strategically managed,” Maciejovsky said. “Like any powerful tool, nostalgia can have unintended consequences if we don’t use it wisely—but when applied thoughtfully, it can transform acquisition challenges into retention advantages.”

Continue Reading

BizNews

MSMEs advised to take small steps towards AI adoption

As intimidating and complex artificial intelligence (AI) tools may be, micro, small, and medium enterprises (MSMEs) should take gradual but steady steps towards exploring how these could make operations more efficient and scalable.

Published

on

As intimidating and complex artificial intelligence (AI) tools may be, micro, small, and medium enterprises (MSMEs) should take gradual but steady steps towards exploring how these could make operations more efficient and scalable, according to Converge ICT Solutions Inc. CEO and 51st Philippine Business Conference and Expo (PBC&E) Chairman Dennis Anthony Uy. 

Speaking before the North Luzon Area Business Conference of the Philippine Chamber of Commerce and Industry (PCCI) held in Bataan province, Uy championed technology adoption, especially in the face of widespread use of new technologies such as generative AI. 

“Companies all over the world are trying to adapt to AI. Here in the Philippines, we’re barely scratching the surface. And the smaller businesses, which are just starting to embrace digitalization, have to learn new ways of doing business with the growing pervasiveness of these new technologies,” said Uy.

“AI is not just for medium to large companies. Micro and small businesses can also find a foothold in the use of the game-changing technology,” he added. “With AI adoption, MSMEs can potentially increase efficiency, reduce costs, and drive competitive edge.”

Coming from a trip to Taiwan which is known as the global hub for the semiconductor industry, Uy noted that artificial intelligence is making its way through the manufacturing value chains of most technology sectors.

“If the Philippines can find a niche spot in this value chain, the multiplier to employment, skills and knowledge upgrading, and the effect on downstream industries is massive,” he said. “While micro and small businesses may not yet be able to participate in these larger value chains, where they can benefit from is by taking small steps in adapting AI tools,” noted Uy. 

From the part of the local government, Bataan Governor Jose Enrique “Joet” Garcia III pledged his support to make his province “future-ready” by hosting start-ups and supporting digitally-enabled businesses.

“We want to express the support of the provincial government of Bataan, of course together with all the local government units for the creative and innovative industry. We know this sector is the key to accelerate more productivity and growth, especially for the youth who were born adept to digital devices,” noted Garcia. 

The possibilities of AI use were experienced first-hand by micro and small businesses in the Byte Forward Hackathon jointly organized by Converge, PCCI, the Department of Trade and Industry, and Converge subsidiary Rev21 Labs. 

Converge and the participating small businesses came up with problem statements stemming from actual pain points experienced in the course of business. Ten teams of third and fourth year college students from Bataan came up with solutions aided by AI tools. 

Artificial intelligence will come into bigger focus in the 51st Philippine Business Conference and Expo organized by the PCCI. As Chairman of the Conference, Uy deliberately made the move to make the event ‘technology-forward’ and bring modern, digital solutions to MSMEs. The Conference will be held on October 20-12 at the SMX Convention Center. 

Continue Reading
Advertisement
Advertisement

Like us on Facebook

Trending