Effects of price framing on consumers' perceptions of online dynamic pricing practices

Fei L. Weisstein, Kent Bourdon Monroe, Monika Kukar-Kinney

Research output: Contribution to journalArticle

Abstract

The viability of online dynamic pricing, or differential pricing for the same product from the same seller, is still debatable given the contradictory findings reported in both modeling and behavioral price research. This paper examines tactical ways for online merchants to mitigate consumers' negative reactions when adopting dynamic pricing strategies. In three experiments, we show that using various price-framing tactics, compared to no framing, can induce price-disadvantaged consumers to perceive their ostensibly similar transactions differently relative to their comparative other parties. As the degree of perceived transaction dissimilarity increases, price-disadvantaged consumers' perceived price fairness, trust, and repurchase intentions are enhanced. We further compare different price framing tactics and demonstrate that they have different effects on consumers across different product price levels, customer segments, and framing formats. The paper concludes with theoretical and managerial implications of the research.

Original languageEnglish (US)
Pages (from-to)501-514
Number of pages14
JournalJournal of the Academy of Marketing Science
Volume41
Issue number5
DOIs
StatePublished - Sep 2013

Keywords

  • Dynamic pricing
  • Price fairness
  • Price framing
  • Promotion
  • Transaction dissimilarity

ASJC Scopus subject areas

  • Business and International Management
  • Economics and Econometrics
  • Marketing

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