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Turning unplanned overpayment into a status signal: how mentioning the price paid repairs satisfaction

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  • Aaron M. Garvey

    () (University of Kentucky)

  • Simon J. Blanchard

    () (Georgetown University)

  • Karen Page Winterich

    () (The Pennsylvania State University)

Abstract

Abstract We investigate how mentioning the price paid to others (which we refer to as price-dropping) can be used to assuage the negative experience that occurs when consumers realize they unintentionally overpaid for a product. Specifically, we show that by engaging in price-dropping, consumers re-appropriate the overpayment into a conspicuous consumption signal that improves their satisfaction. Two studies demonstrate that the effect of price-dropping is mitigated when consumers who overpaid have low sensitivity to status cues, and also when the audience of the price-drop is unreceptive to status cues. We discuss how price-dropping has implications for retailer pricing policies and customer experience, along with avenues for future research.

Suggested Citation

  • Aaron M. Garvey & Simon J. Blanchard & Karen Page Winterich, 2017. "Turning unplanned overpayment into a status signal: how mentioning the price paid repairs satisfaction," Marketing Letters, Springer, vol. 28(1), pages 71-83, March.
  • Handle: RePEc:kap:mktlet:v:28:y:2017:i:1:d:10.1007_s11002-015-9383-9
    DOI: 10.1007/s11002-015-9383-9
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    References listed on IDEAS

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