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When higher prices increase sales: How chronic and manipulated desires for conspicuousness and rarity moderate price's impact on choice of luxury brands

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  • Hwang, Yookyung
  • Ko, Eunju
  • Megehee, Carol M.

Abstract

This study examines the impact of low, medium, and high prices on luxury brand choices by consumers very high versus very low in chronic desire for conspicuousness (CC) on selection of a luxury brand, namely, as well as the combination of very high versus very low chronic desire for rarity (CR). The research design tests and confirms the nomological validity of a system of relationships among chronic and manipulated conditions. High versus low manipulated desire for conspicuousness (MC) and manipulated desire for rarity (MR) conjoined with high versus low chronic desire for conspicuousness (CC) and chronic desire for rarity (CR) moderates the typically hypothesized negative main effect of price on demand and may cause a positive main effect of price on luxury brand choice across a relevant range of price-points. These findings confirm the applied theory that for some consumers, chronic psychological states in combination with manipulated related states allow for—perhaps demand that—merchants to charge higher prices to increase sales of luxury brands.

Suggested Citation

  • Hwang, Yookyung & Ko, Eunju & Megehee, Carol M., 2014. "When higher prices increase sales: How chronic and manipulated desires for conspicuousness and rarity moderate price's impact on choice of luxury brands," Journal of Business Research, Elsevier, vol. 67(9), pages 1912-1920.
    • Handle: RePEc:eee:jbrese:v:67:y:2014:i:9:p:1912-1920
    DOI: 10.1016/j.jbusres.2013.11.021
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