Purpose – This paper seeks to propose a novel pricing system for co-branding goods by utilizing perceived value, which employs prospect theory (PT) and mental accounting to acquire the consumer's perceived value and to estimate an appropriate price.
Design/methodology/approach – The approach taken is design science, an artifact of automatic pricing system for co-branding goods.
Findings – The results reveal that PT is superior to expected utility theory in terms of adjusted perceived prices and decision weight probabilities.
Practical implications – This paper aims to provide clues for industries in terms of providing a customer-centric pricing method, systematic and automatic approach, and pricing-based strategic information system.
Originality/value – The proposed pricing method: applies value-based method to estimate the co-brand price, considers risk and real-world decision making, provides an efficient and effective approach, and enhances the competitiveness of price through the system.