A Range Theory Account of Price Perception

Janiszewski, Chris; Lichtenstein, Donald R.

doi:10.1086/209544

Cited by 272 publications

(230 citation statements)

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“…The experiments reported here extend the work of Janiszewski and Lichtenstein (1999) in a number of important ways. First, we attempt to overcome the limitations of testing contextual models using only the ANOVA framework.…”

supporting

confidence: 82%

“…Exemplar models assume that judgments are based on comparisons to specific category members rather than a comparison to summary information about a typical member (Medin et al 1984). The exemplar model of categorization is consistent with a conceptualization of reference price as a range of prices or the latitude of acceptable prices rather than a single summary price (e.g., Janiszewski and Lichtenstein 1999;Kalyanaram and Little 1994;Lichtenstein and Bearden 1989;Monroe 1971). However, with the exception of Janiszewski and Lichtenstein (1999), the prototype model has typically been used to explain price evaluations in such experiments.…”

mentioning

confidence: 83%

“…The exemplar model of categorization is consistent with a conceptualization of reference price as a range of prices or the latitude of acceptable prices rather than a single summary price (e.g., Janiszewski and Lichtenstein 1999;Kalyanaram and Little 1994;Lichtenstein and Bearden 1989;Monroe 1971). However, with the exception of Janiszewski and Lichtenstein (1999), the prototype model has typically been used to explain price evaluations in such experiments. In a series of four experiments, Janiszewski and Lichtenstein (1999) compared Volkmann's (1951) range theory to Helson's adaptation-level theory.…”

mentioning

confidence: 83%

“…Rather than evaluate only the mean, we had participants evaluate several target stimuli spaced at different intervals along the range. Third, Janiszewski and Lichtenstein (1999) compared ratings in contextual sets in which the mean price was held constant and the range was varied. However, price judgments can be affected by frequency manipulations (Alba et al 1994;Alba et al 1999;Kalwani and Yim 1992).…”

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confidence: 99%

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Reference Price and Price Perceptions: A Comparison of Alternative Models

Niedrich¹,

2001

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Reference price effects on consumer price perceptions are often explained by Helson's adaptation-level theory, in which the cognitive representation of reference price is the prototype of the relevant category. However, recent conceptualizations and empirical evidence suggest the possibility of an exemplar model, which may be specified using Volkmann's range theory or Parducci's range-frequency theory.In two experiments, these three contextual models of reference price effects are pitted against one another. Based on the MANOVA and model fitting, range-frequency theory accounted for reference price effects that the other theories could not, suggesting that consumers compare the target price against specific members of the category rather than the category prototype. A third experiment demonstrated that range and frequency effects are moderated by the stimulus presentation condition, suggesting that consumers place greater weight on extreme prices anchoring the range for internal reference prices than for external reference prices.

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confidence: 82%

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confidence: 83%

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confidence: 83%

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confidence: 99%

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Reference Price and Price Perceptions: A Comparison of Alternative Models

Niedrich¹,

2001

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“…But one theory assumes that every price change is either a loss or gain regardless of how small the change might be (Kahneman and Tversky 1979;Tversky and Kahneman 1981). The other theory assumes that there is a latitude of indifference within which consumers are not sensitive to changes in price (Sherif and Hovland 1961;Janiszewski and Lichtenstein 1999;Niedrich et al 2001). The latter theory is often called range theory-we will refer to it as loss aversion theory with a non-zero threshold (e.g., Kalyanaram and Little 1994;Han et al 2001;Raman and Bass 2002;Pauwels et al 2003).…”

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confidence: 99%

Detecting price thresholds in choice models using a semi-parametric approach

2013

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The semi-parametric methodology, underutilized in marketing, can be applied to distinguish between competing models of price response and to estimate the model that most validly describes consumer response to price. The methodology is robust and flexible, thereby making it applicable to a wide spectrum of models of consumer response. In the specific context of reference prices, we show that the semi-parametric methodology helps the manager develop price promotions that most effectively capitalize on the nature of consumer price response.

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