Research Note—Attention Arousal Through Price Partitioning

Bertini, Marco; Wathieu, Luc

doi:10.1287/mksc.1070.0295

Cited by 99 publications

(86 citation statements)

References 41 publications

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“…Experimental research in behavioral marketing suggests consumer preferences of value can be significantly influenced by price structures (Wathieu and Bertini 2007;Bertini and Wathieu 2008). Recent research summarized here (Ascarza et al 2010 andIyengar et al 2011) using data from the field support this conclusion.…”

Section: Avenues For Future Researchsupporting

confidence: 57%

Price discrimination in service industries

et al. 2012

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This article outlines recent methods and applications directed at understanding the profit and consumer welfare implications of increasingly prevalent price discrimination strategies in the service sector. These industries are typically characterized by heterogeneity in consumers' valuation and usage of the service, resale constraints, and a focus on price as the service's key attribute. The article focuses on how firms use nonlinear pricing or bundling strategies to benefit from the heterogeneity in consumer demand. We describe the basic economic model commonly used in the literature to analyze such strategic choices and present recent methodological improvements to this benchmark. A discussion of existing applications and future research opportunities concludes the article.

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Section: Avenues For Future Researchsupporting

confidence: 57%

Price discrimination in service industries

et al. 2012

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“…Similarly, price partitioning refers to revealing the price of the component parts of a product; for example, by dividing a product's price into its base price and shipping and handling (Bertini and Wathieu 2008;Morwitz, Greenleaf, and Johnson 1998). Price transparency and price partitioning have both been found to increase purchase intentions, and to do so via a cognitive process (Morwitz et al, 1998).…”

Section: (Insert Figure 1 About Here)mentioning

confidence: 99%

Lifting the Veil: The Benefits of Cost Transparency

Mohan

Buell²,

John³

2014

SSRN Journal

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A firm's costs are typically tightly-guarded secrets. However, across a field study and six laboratory experiments we identify when and why firms benefit from revealing unit cost information to consumers. A natural field experiment conducted with an online retailer suggests that cost transparency boosts sales. Six subsequent controlled lab experiments replicate this basic effect (Studies 2-6) and provide evidence for why it occurs: just as interpersonal disclosure of intimate information increases attraction, cost transparency by a firm increases brand attraction, in turn boosting consumer purchase interest. This relationship persists even after controlling for perceptions of price fairness and product quality (Study 3). Study 4 suggests that the beneficial effect of cost transparency holds when firms spend more on "less desirable" costs relative to "more desirable" costs. Studies 5-6 show that the effect of cost transparency weakens when high profit margins are made salient. Finally, Study 7 shows that the beneficial effect reverses (i.e. cost transparency backfires) when it is revealed that a firm's profit margins are high relative to those of its competitors.

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“…Shugan (2005, p. 4) argues that "different assumptions are appropriate for different research objectives." Many explanatory theories are tested with prediction (e.g., Bertini and Wathieu 2008, Bradlow and Park 2007, Cui and Curry 2005, Gilbride and Allenby 2006, Syam et al 2008, Toubia et al 2007). Explanatory and predictive theories are both valuable, but all theories are subject to potential predictive falsification-hopefully, not subjective opinions about the realism of their assumptions.…”

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confidence: 99%

Commentary—Relevancy Is Robust Prediction, Not Alleged Realism

Shugan

2009

Marketing Science

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Remember James Boswell, ninth Laird of Auchinleck, author of the famous maxim that the road to hell is paved with good intentions? Trying to build realistic theories differs dramatically from having correct explanatory theories tested on objective criteria, e.g., verifiable prediction. Evaluating theories on whether assumptions are realistic is potentially subjective, biased, and arbitrary. A theory's domain determines whether its assumptions are sufficiently realistic and when assumptions must hold and to what degree, so testing assumptions in isolation puts an unnecessary burden on the assumptions (i.e., they must hold everywhere). For theories explaining cooperation and information exchange, predictions reveal that the prisoner's dilemma assumptions (only two prisoners, four possible outcomes, two possible actions, etc.) are sufficiently realistic. For theories explaining prisoner sentencing guidelines and probation policy, predictions might suggest otherwise. Scientific methods allow the evaluation theories on criteria such predictive accuracy, reliability, validity, and robustness-not realism. When multiple explanatory theories survive initial testing, one derives conflicting predictions. Tragic consequences can occur when theory adoption depends on whether assumptions are disliked, unpopular, or exclude a favorite variable. Pity journals that reject models with insightful new implications because the assumptions are too simple or merely disliked. The term "unrealistic" sometimes means personally disliked.

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Research Note—Attention Arousal Through Price Partitioning

Cited by 99 publications

References 41 publications

Price discrimination in service industries

Price discrimination in service industries

Lifting the Veil: The Benefits of Cost Transparency

Commentary—Relevancy Is Robust Prediction, Not Alleged Realism

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