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The double benefits of consumer certainty: combining risk and range effects

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  • Erik Maier
  • Robert Wilken
  • Florian Dost

Abstract

We investigate consumer certainty as an important dimension of attitude strength and explore its influence on willingness to pay (WTP) ranges. WTP ranges are defined by two thresholds (floor/minimum and ceiling/maximum reservation price); their difference indicates the degree of (un)certainty. Across five studies (online, laboratory, and field experiments plus a field survey) with more than 25,000 participants, we find that increased consumer certainty generates an asymmetric shift in the WTP thresholds, such that the floor price increases more strongly than the ceiling price, which also implies a reduction in the WTP range. Consequently, this research specifies predictions offered by choice models that use Bayesian learning. The asymmetric effects appear, irrespective of the source of uncertainty, so our study advances understanding of whether consumers differ in their behavior as a consequence of preference or product performance uncertainty. Copyright Springer Science+Business Media New York 2015

Suggested Citation

  • Erik Maier & Robert Wilken & Florian Dost, 2015. "The double benefits of consumer certainty: combining risk and range effects," Marketing Letters, Springer, vol. 26(4), pages 473-488, December.
    • Handle: RePEc:kap:mktlet:v:26:y:2015:i:4:p:473-488
    DOI: 10.1007/s11002-014-9282-5
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    2. Dost, Florian & Geiger, Ingmar, 2017. "Value-based pricing in competitive situations with the help of multi-product price response maps," Journal of Business Research, Elsevier, vol. 76(C), pages 219-236.
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    5. Boden, Joe & Maier, Erik & Wilken, Robert, 2020. "The effect of credit card versus mobile payment on convenience and consumers’ willingness to pay," Journal of Retailing and Consumer Services, Elsevier, vol. 52(C).

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