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Quality cue or price anchoring: The effect of price on consumer behavior in repeat experiments

Author

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  • Luqing Yu
  • Zhifeng Gao
  • Lisa House

Abstract

Price is one of the most important factors affecting consumer purchase decisions. Consumers may use price as a quality cue or reference point to make the decisions. However, few studies have considered the quality cue by controlling the price anchoring and vice versa. We conduct four identical experiments weeks apart to estimate the effect of price on consumers' product quality evaluation and WTP. The results show that (1) the price has a significant impact on appearance rating and taste rating; (2) product quality mediates the price effect on consumer WTP only if consumers have incomplete quality information about the product; and (3) the marginal effect of price on consumer WTP differs over time. The results of this study provide deep insights into the role of price on consumers' quality assessment and valuation formation of products. Le prix est l'un des facteurs les plus importants influençant les décisions d'achat des consommateurs. Les consommateurs peuvent utiliser le prix comme un indice de qualité ou un point de référence pour prendre leurs décisions. Cependant, peu d'études ont pris en compte l'indice de qualité en contrôlant l'ancrage des prix, et vice versa. Nous avons mené quatre expériences identiques, espacées de plusieurs semaines, afin d'estimer l'effet du prix sur l'évaluation de la qualité des produits et la disposition à payer (WTP) des consommateurs. Les résultats montrent que (1) le prix a un impact significatif sur l'évaluation de l'apparence et du goût; (2) la qualité du produit médie l'effet du prix sur la disposition à payer des consommateurs seulement si ces derniers ont des informations incomplètes sur la qualité du produit; et (3) l'effet marginal du prix sur la disposition à payer des consommateurs varie dans le temps. Les résultats de cette étude offrent des perspectives approfondies sur le rôle du prix dans l'évaluation de la qualité des produits et la formation de leur valorisation.

Suggested Citation

  • Luqing Yu & Zhifeng Gao & Lisa House, 2025. "Quality cue or price anchoring: The effect of price on consumer behavior in repeat experiments," Canadian Journal of Agricultural Economics/Revue canadienne d'agroeconomie, Canadian Agricultural Economics Society/Societe canadienne d'agroeconomie, vol. 73(1), pages 53-74, March.
    • Handle: RePEc:bla:canjag:v:73:y:2025:i:1:p:53-74
    DOI: 10.1111/cjag.12385
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    References listed on IDEAS

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