This article explores the effect of contextual or situational influences on buyer's price judgements. After reviewing relevant literature on contextual influences, the article reports on two experiments investigating the effects of use or purpose of a purchase and previous exposure to a set of prices on subsequent price judgements. In the first experiment, the hypothesis that the number of judgmental categories will vary with the length of price series was not confirmed. Subjects did not differ in their judgement of the lowest acceptable prices, but a higher latitude of acceptance occurred for the long price series-an assimilation effect. The second experiment confirmed the hypothesis that the intended use or purpose of the purchase affects how individuals evaluate prices for the product. The context of intended use offers an additional reason why higher prices can be attractive to some buyers. The two experiments were conducted on 104 male and 32 female undergraduate business majors. In the first experiment subjects sorted, arranged, and categorized a set of 50 prices for pants. Immediately following this task, the second experiment asked the subjects to rate the relative expensiveness of five experimenter-determined prices. In the first experiment prices either ranged from $1.00 to $25.50 or $1.00 to $50.00. In the second experiment, each split-half was given either five low prices or five high prices. Finally, each sample quarter was divided and asked to assume a different reason for buying the pants.
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