Journal of the Academy of Marketing Science

, Volume 41, Issue 5, pp 501–514 | Cite as

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

  • Fei L. Weisstein
  • Kent B. Monroe
  • Monika Kukar-Kinney
Original Empirical Research

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.

Keywords

Dynamic pricing Price framing Transaction dissimilarity Promotion Price fairness 

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Copyright information

© Academy of Marketing Science 2013

Authors and Affiliations

  • Fei L. Weisstein
    • 1
  • Kent B. Monroe
    • 2
  • Monika Kukar-Kinney
    • 3
  1. 1.College of Business Administration, The University of Texas—Pan AmericanEdinburgUSA
  2. 2.University of Illinois at Urbana-ChampaignUniversity of RichmondGlen AllenUSA
  3. 3.Robins School of Business, University of RichmondRichmondUSA

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