The effects of pricing strategy on upgrade intentions

Liu, Hsin‐Hsien; Chou, Hsuan‐Yi

doi:10.1108/mip-08-2020-0343

Cited by 7 publications

(12 citation statements)

References 36 publications

(82 reference statements)

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“…Van Putten et al (2010) point out that individuals who strongly care about past actions and brood on faults tend to make the sunk cost fallacy more than people who can easily let bad experiences go. These statements are in line with the findings obtained by Liu and Chou (2021). They suggest that consumers who are more action-oriented, that is, tend to get over prior bad experiences easily, are more likely to eliminate sunk costs and depreciate their owned goods.…”

Section: Thematic Findingssupporting

confidence: 90%

“…In their pioneering work, Arkes and Blumer (1985) establish that the sunk cost fallacy arises when an individual invests money, time or effort in actions, and they tend to invest additional resources to continue the actions. In contrast, some studies (Liu and Chou, 2021; van Dijk et al , 2021) do not confirm the sunk cost effect. The sunk cost effect influences consumer behaviour in several aspects, as humans are unable to exclude and often consciously consider their already used and unrecoverable resources in their judgements and decision-making.…”

Section: Introductionmentioning

confidence: 86%

“…Frederiks et al , 2015; Iyengar et al , 2022) indicate sunk cost fallacy, a number of scholars (e.g. Ashraf et al , 2010; Liu and Chou, 2021) conclude that past investments do not impact consumer behaviour and choices after paying for a product or service.…”

Section: Thematic Findingsmentioning

confidence: 99%

“…Qiu and Cai, 2021) examine the impact of past behavioural investments on purchasing decisions, while others (e.g. Liu and Chou, 2021) investigate the sunk cost effect regarding post-purchasing evaluation, behaviour, and choices. The role of sunk costs in switching behaviour is also scrutinised (e.g.…”

Section: Introductionmentioning

confidence: 99%

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The impact of financial and behavioural sunk costs on consumers’ choices

Kovács

2024

JCM

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Purpose The purpose of this paper is to develop a systematic literature review on the sunk cost effect from consumers’ perspectives. By applying a comprehensive approach, this paper aims to synthesise and discuss the impact of financial and behavioural sunk costs on consumers’ decisions, judgements and behaviour before and after purchasing. This study also identifies potential research avenues to inspire further studies. Design/methodology/approach Following a search in the Scopus and Web of Science databases, a systematic literature review was conducted by identifying and analysing 56 peer-reviewed articles published between 1985 and 2022 (November). Descriptive and content analysis was implemented based on the selected papers to examine and synthesise the effect of sunk costs on consumers’ choices, evaluations and actions in a comprehensive approach; uncover research gaps; and recommend paths for future research. Findings The research results found in the literature are discussed according to five related themes: factors affecting the sunk cost effect; the impact of past investments on purchasing decisions; consumers’ post-purchasing evaluation, behaviour and choices; the mental amortisation of price; and the sunk cost effect on loyalty and switching. Originality/value The originality of this study lies in the comprehensive approach to the sunk cost effect from consumers’ perspectives. This review paper synthesises and discusses the research results found in the literature related to financial and behavioural sunk costs that can influence consumers’ decisions, judgements and behaviour before and after paying for a good or service.

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Section: Thematic Findingssupporting

confidence: 90%

Section: Introductionmentioning

confidence: 86%

Section: Thematic Findingsmentioning

confidence: 99%

Section: Introductionmentioning

confidence: 99%

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The impact of financial and behavioural sunk costs on consumers’ choices

Kovács

2024

JCM

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“…Finally, marketers can choose to use partitioned (vs. all-inclusive) pricing. Partitioned (vs. all-inclusive) pricing enhances consumers' upgrade intentions by lowering their perception of the residual value for the current product (Liu and Chou, 2021).…”

Section: Introductionmentioning

confidence: 99%

Does repurchase timing matter in promotional framing effect?

Wang

2022

MIP

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PurposeAlthough the evidence exists for the effect of promotional frame on repurchase intention, it is unclear whether the timing of repurchase can moderate the effect. In this paper, three experiments were conducted to answer this question.Design/methodology/approachIn Experiment 1, a 2 (framing: bundle vs. gift) × 2 (repurchase target: focal vs. supplementary) × 2 (timing: short vs. long) between-subjects design was used. In Experiment 2, an identical design was used except that repurchase target being the within-subjects factor. In Experiment 3, the design was based on that of Experiment 2 and brand was added a between-subjects factor.FindingsExperiment 1 showed that, with a short interval, repurchase intention under gift frame was higher than that under bundle frame. With a long interval, there was no significant difference between the gift and bundle frames. Experiment 2, however, indicated no effects for expensive products. Experiment 3 showed that brand (private versus national brand) moderate the interaction between framing, repurchase target and timing. Particularly, for private brand, no significant comparisons were found; for national brand, repurchase intention for the focal product was significantly higher than for the supplementary product, but only under the conditions of long interval and gift frame (rather than bundle frame).Originality/valueTaken together, findings from the current study contributes to the literature by showing for the first time that repurchase timing can moderate the promotional frame effect (i.e. higher repurchase intention under gift framing relative to bundle framing occurs in the short interval but not long interval) and that brand type can moderate the joint effects of framing, timing and repurchase target (i.e. national brand, rather than private brand, paired with long interval and gift frame results in higher repurchase intention for the focal product). The findings provide marketers with important knowledge in terms of how to adjust a promotional frame depending on when consumers repurchase a product and whether the product has a private or national brand.

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