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Do consumers really know if the price is right ? Direct measures of references price are their implications for retailing

Author

Listed:
  • VANHUELE, Marc
  • DREZE, Xavier

Abstract

Reference price research suggest that consumers memorize and recall price information when selecting brands for frequently purchased products. In this study, we show that previous price-knowledge surveys provided imperfect estimates of reference price. Further, we propose to use a combination of price recall, price recognition, and deal recognition to measure representations to memorize prices. In addition we identify consumer and product characteristics that explain the variations in price knowledge.

Suggested Citation

  • VANHUELE, Marc & DREZE, Xavier, 2000. "Do consumers really know if the price is right ? Direct measures of references price are their implications for retailing," Les Cahiers de Recherche 711, HEC Paris.
  • Handle: RePEc:ebg:heccah:0711
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    File URL: http://www.hec.fr/var/fre/storage/original/application/1ca1f8fee6a19d3a3fe7b1fa3ae9dc4d.pdf
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    References listed on IDEAS

    as
    1. Stiving, Mark & Winer, Russell S, 1997. " An Empirical Analysis of Price Endings with Scanner Data," Journal of Consumer Research, Oxford University Press, vol. 24(1), pages 57-67, June.
    2. Briesch, Richard A, et al, 1997. " A Comparative Analysis of Reference Price Models," Journal of Consumer Research, Oxford University Press, vol. 24(2), pages 202-214, September.
    3. Urbany, Joel E & Dickson, Peter R, 1991. " Consumer Normal Price Estimation: Market versus Personal Standards," Journal of Consumer Research, Oxford University Press, vol. 18(1), pages 45-51, June.
    4. Schindler, Robert M & Kirby, Patrick N, 1997. " Patterns of Rightmost Digits Used in Advertised Prices: Implications for Nine-Ending Effects," Journal of Consumer Research, Oxford University Press, vol. 24(2), pages 192-201, September.
    5. Kalyanaram, Gurumurthy & Little, John D C, 1994. " An Empirical Analysis of Latitude of Price Acceptance in Consumer Package Goods," Journal of Consumer Research, Oxford University Press, vol. 21(3), pages 408-418, December.
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    More about this item

    Keywords

    price knowledge; reference price; retailing;

    JEL classification:

    • D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
    • E31 - Macroeconomics and Monetary Economics - - Prices, Business Fluctuations, and Cycles - - - Price Level; Inflation; Deflation
    • L81 - Industrial Organization - - Industry Studies: Services - - - Retail and Wholesale Trade; e-Commerce

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