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A Range Theory Account of Price Perception

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  • Janiszewski, Chris
  • Lichtenstein, Donald R
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    Abstract

    It is well accepted in the behavioral pricing literature that a consumer's perception of the attractiveness of a market price depends on a comparison of the market price to an internal reference price. The rationale underlying this dynamic has its roots in Adaptation-Level Theory. However, consistent with Range Theory, we postulate that a consumer's assessment of the attractiveness of a market price may also depend on a comparison of the market price to the endpoints of the evoked price range. Four experiments provide evidence that variance in the width of the evoked price range affects price-attractiveness judgments in the absence of any variance in the internal reference price. Of theoretical importance, findings from the present article suggest that pricing theory is in need of augmentation in order to account for this effect. Of managerial relevance, these findings suggest that changes in context can bring about changes in the evoked price range and perceptions of the attractiveness of a market price. Copyright 1999 by the University of Chicago.

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    Bibliographic Info

    Article provided by University of Chicago Press in its journal Journal of Consumer Research.

    Volume (Year): 25 (1999)
    Issue (Month): 4 (March)
    Pages: 353-68

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    Handle: RePEc:ucp:jconrs:v:25:y:1999:i:4:p:353-68

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    Web page: http://www.journals.uchicago.edu/JCR/

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    Cited by:
    1. Ranyard, Rob & Missier, Fabio Del & Bonini, Nicolao & Duxbury, Darren & Summers, Barbara, 2008. "Perceptions and expectations of price changes and inflation: A review and conceptual framework," Journal of Economic Psychology, Elsevier, vol. 29(4), pages 378-400, August.
    2. Mantin, Benny & Gillen, David, 2011. "The hidden information content of price movements," European Journal of Operational Research, Elsevier, vol. 211(2), pages 385-393, June.
    3. Moon, Sangkil & Voss, Glenn, 2009. "How do price range shoppers differ from reference price point shoppers?," Journal of Business Research, Elsevier, vol. 62(1), pages 31-38, January.
    4. Ambra Poggi, 2010. "Within-establishment wage inequality and satisfaction," LABORatorio R. Revelli Working Papers Series 100, LABORatorio R. Revelli, Centre for Employment Studies.
    5. Kevin Dayaratna & P. Kannan, 2012. "A mathematical reformulation of the reference price," Marketing Letters, Springer, vol. 23(3), pages 839-849, September.
    6. Antonides, Gerrit, 2008. "How is perceived inflation related to actual price changes in the European Union?," Journal of Economic Psychology, Elsevier, vol. 29(4), pages 417-432, August.
    7. Pechtl, Hans, 2004. "Das Preiswissen von Konsumenten: eine theoretisch-konzeptionelle Analyse," Wirtschaftswissenschaftliche Diskussionspapiere 01/2004, Ernst Moritz Arndt University of Greifswald, Faculty of Law and Economics.
    8. Magnini, Vincent P. & Karande, Kiran, 2011. "Understanding consumer services buyers based upon their purchase channel," Journal of Business Research, Elsevier, vol. 64(6), pages 543-550, June.
    9. Brown, Gordon D. A. & Gardner, Jonathan & Oswald, Andrew J. & Qian, Jing, 2005. "Does Wage Rank Affect Employees' Wellbeing?," IZA Discussion Papers 1505, Institute for the Study of Labor (IZA).
    10. Bonsall, Peter & Shires, Jeremy & Maule, John & Matthews, Bryan & Beale, Jo, 2007. "Responses to complex pricing signals: Theory, evidence and implications for road pricing," Transportation Research Part A: Policy and Practice, Elsevier, vol. 41(7), pages 672-683, August.
    11. Kaplan, Sigal & Bekhor, Shlomo & Shiftan, Yoram, 2011. "Eliciting and estimating reservation price: A semi-compensatory approach," Journal of Business Research, Elsevier, vol. 64(1), pages 45-50, January.

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