A Reduced-Form Framework for Price Determination: Scarcity, Credibility, and Quality Trend with Applications to Perishable Goods and Price Distortion

This is a preprint of the manuscript: "A Reduced-Form Framework for Price Determination: Scarcity, Credibility, and Quality Trend with Applications to Perishable Goods and Price Distortion" Abstract:We propose a parsimonious reduced-form framework in which the market price of a good is expressed as the product of a base price, a scarcity index, a credibility discount, a current quality level, and a quality-trend adjustment. The framework is applied to perishable agricultural goods, durable/virtual goods, and various forms of price distortion. The manuscript has been submitted to a peer-reviewed journal and is currently under review.