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

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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.

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Notes

  1. We thank an anonymous reviewer for suggesting that a more complex model investigating these relationships should be investigated.

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Authors and Affiliations

  1. College of Business Administration, The University of Texas—Pan American, Edinburg, TX, 78539, USA

    Fei L. Weisstein

  2. University of Illinois at Urbana-Champaign, University of Richmond, 11357 Nuckols Road, #128, Glen Allen, VA, 23059, USA

    Kent B. Monroe

  3. Robins School of Business, University of Richmond, Richmond, VA, 23173, USA

    Monika Kukar-Kinney

Authors
  1. Fei L. Weisstein
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  2. Kent B. Monroe
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  3. Monika Kukar-Kinney
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Corresponding author

Correspondence to Kent B. Monroe.

Appendix

Appendix

Table 5 Multi-items scales used, average shared variance, item and construct reliabilities in Studies 1–3
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Weisstein, F.L., Monroe, K.B. & Kukar-Kinney, M. Effects of price framing on consumers’ perceptions of online dynamic pricing practices. J. of the Acad. Mark. Sci. 41, 501–514 (2013). https://doi.org/10.1007/s11747-013-0330-0

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  • DOI: https://doi.org/10.1007/s11747-013-0330-0

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