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The Impact of Price Disclosure on Dynamic Shopping Decisions

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Author Info
Benedict Dellaert ()
Vladislav Golounov ()
Jaideep Prabhu ()

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Abstract

A potentially powerful way to assist consumers in making dynamic shopping decisions is to disclose price information to them before they shop, for example by posting prices on the Internet. This paper addresses the differential impact of disclosing either only current, or both current and future prices, on consumer shopping decisions in multi-period tasks involving multiple product purchases. In the context of an Internet-based experiment, we find that consumer expenditure deviates more strongly from that of a normative model when both current and future prices are disclosed than if only current prices are disclosed. We investigate the behavioral effects underlying this finding by estimating a model that allows for variations in consumer discounting, strength of store price format preferences, as well as choice consistency between different price disclosure conditions. Copyright Springer Science + Business Media, Inc. 2005

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File URL: http://hdl.handle.net/10.1007/s11002-005-0719-8
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Publisher Info
Article provided by Springer in its journal Marketing Letters.

Volume (Year): 16 (2005)
Issue (Month): 1 (January)
Pages: 37-52
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Handle: RePEc:kap:mktlet:v:16:y:2005:i:1:p:37-52

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Web page: http://www.springerlink.com/link.asp?id=100312

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Related research
Keywords: consumer behavior dynamic choice models consumer decision-making price disclosure

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References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:
  1. Joffre Swait & Wiktor Adamowicz, . "Choice Environment, Market Complexity and Consumer Behavior: A Theoretical and Empirical Approach to Incorporating Decision Complexity into Models of Consumer Choice. 29 p," Staff Papers 9904, University of Alberta, Department of Rural Economics. [Downloadable!]
  2. Swait, Joffre & Adamowicz, Wiktor, 2001. " The Influence of Task Complexity on Consumer Choice: A Latent Class Model of Decision Strategy Switching," Journal of Consumer Research: An Interdisciplinary Quarterly, University of Chicago Press, vol. 28(1), pages 135-48, June.
  3. Swait, Joffre & Adamowicz, Wiktor, 2001. "Choice Environment, Market Complexity, and Consumer Behavior: A Theoretical and Empirical Approach for Incorporating Decision Complexity into Models of Consumer Choice," Organizational Behavior and Human Decision Processes, Elsevier, vol. 86(2), pages 141-167, November. [Downloadable!] (restricted)
  4. Bettman, James R. & Johnson, Eric J. & Payne, John W., 1990. "A componential analysis of cognitive effort in choice," Organizational Behavior and Human Decision Processes, Elsevier, vol. 45(1), pages 111-139, February. [Downloadable!] (restricted)
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