All in US International Policy
A firm that wants to increase the price should “nibble” at price increases. That is, the increases must be small. Preferably, small enough to be within the latitude of price acceptance which will mean that there will be no impact on the probability of purchase. With the increase price, the reference price will also increase in the adaptive model. As the reference price increases, price latitude will increase. So, there is much benefit in small increments of price increases.
The decision to lift some of the restrictions on Huawei is a prudent and mutually beneficial move. As matter of negotiating chip, there are still many pending restrictions on Huawei. The US administration should consider relaxing the restrictions further. Such action will not only engender the goodwill of Chinese government, it will also enhance the productivity and innovation.
Trump administration deserves credit for its likely success in its negotiations with China on commerce and trade. However, not only business and commerce but geo-political considerations also urge a solution to Huawei situation. After all, China’s government is deeply interested in a solution to this issue. Further, other countries may not only gain a technological lead but also geo-political advantage by engaging with Huawei. Apart from UK which is considering engagement with Huawei, so are Canada (on how to repair the relations) and Switzerland.