There are certain times when the demand for Uber rides increases $($bad weather, rush hour, special events, etc.$).$ Uber uses $$surge pricing$$ as a way of charging more during these periods of high demand. Customers aren$$t always happy about this $($see$,$ for example, surge price and customer complaintsLinks to an external site.$),$ and traditional taxi cab drivers are happy to accuse their rivals of $$exploiting customers.$$

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Considering the principles of "prospect theory" to address the psychological biases of its customers, which of the following marketing strategies could Uber employ to reduce negative reactions to surge pricing?

Uber Surge Pricing

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There are certain times when the demand for Uber rides increases $($bad weather, rush hour, special events, etc.$).$ Uber uses $$surge pricing$$ as a way of charging more during these periods of high demand. Customers aren$$t always happy about this $($see$,$ for example, surge price and customer complaintsLinks to an external site.$),$ and traditional taxi cab drivers are happy to accuse their rivals of $$exploiting customers.$$

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Considering the principles of "prospect theory" to address the psychological biases of its customers, which of the following marketing strategies could Uber employ to reduce negative reactions to surge pricing?

Provide detailed breakdowns of ride costs to customers during surge pricing, including driver earnings and operational costs.

Market regular fares as a discount applied during times of lower demand rather than focusing on higher prices during peak times.

Announce that a percentage of every surge pricing fare will be donated to local charities.

Use more advertisements during surge pricing periods to promote the availability of rides.

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