Behavioral Pricing Practices in Thrift Shop MSMEs: A Phenomenological Analysis

Abstract

Traditional management accounting studies emphasize the use of Cost-Plus Pricing through the calculation of the Cost of Goods Sold (COGS) per unit. However, this framework fails to accommodate informal business entities such as thrift shop micro, small, and medium enterprises (MSMEs) that utilize a blind-bundle procurement system, which fundamentally cuts off access to per-unit cost information. This article aims to deconstruct the pricing practices of thrift shop MSMEs when real cost information is unavailable. This study utilizes a qualitative approach with a descriptive phenomenological design. Data were collected through observations and in-depth interviews with three typologies of business actors: hybrid systems, multi-stores, and live-streamers, in the Kediri region. The results show that business actors compensate for the absence of COGS by applying Behavioral Pricing driven by cognitive heuristics. The mental accounting mechanism is actively used to execute cross-subsidization practices to cover operational costs and conduct cash recovery to maintain liquidity. In addition, the formation of product value is heavily influenced by the effort heuristic and narrative pricing through the manipulation of information asymmetry. The contribution of this paper expands behavioral accounting literature by proving that the absence of COGS in informal entities is not a failure of financial literacy, but rather a trigger for the emergence of managerial cognitive agility. The conclusion of this study confirms that seemingly arbitrary pricing practices are essentially psychologically rational adaptive strategies that are highly crucial for maintaining the business continuity of MSMEs amidst the uncertainty of the informal economic ecosystem.