Abstract This study aims to test the impact of price preciseness on compromise and decoy effects, analyze the different presentation styles of price information (a precise price presentation vs. a rounded one), and investigate the moderating role of individual differences (i.e., lay rationalism) and decision situations (i.e., time pressure) in travel decision making. It uses a series of empirical tests in which only people with high lay rationalism can distinguish the difference between precise and rounded price information. Major findings show that compromise and decoy effects are salient when a price cue exists, as price information helps the trade-off among options. This study also finds that significant context effects prevail irrespective of price preciseness. Respondents with high lay rationalism or under high time pressure conditions show a tendency to acknowledge discrepancies among options for precise pricing in decision making but not for rounded pricing, thereby resulting in high decoy effects.
Last. Roger Marshall(AUT: Auckland University of Technology)H-Index: 21
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Abstract 159.99, 159.38 or 60.00? The phenomenon of pricing around a rounded number, with apparent preciseness, is commonly observed in the marketplace. Much research has been conducted in the general area, and has established that the use of precise prices, those without a zero-ending, tends to lead to increased sales and to a more positive customer attitude. To date, the best explanation offered is that most people read from left to right, so the last numbers of a price may be less salient ...
Abstract Hotel scores are critical indicators of satisfaction. However, the diversity of methodologies for calculating these indicators leads to notable differences. To explore such discrepancies, this study investigated the differences when monetary and non-monetary components are included in the measures of satisfaction. The empirical test conducted on over 26,000 hotels revealed that exclusively using non-monetary components in satisfaction measures (e.g., arithmetic mean of non-monetary attr...
This research investigates the impact of different degrees of price dispersion on travelers’ hotel choice. More specifically, within an online travel agency (OTA) context, we examine the effect of ...
Last. Kenneth F. Hyde(AUT: Auckland University of Technology)H-Index: 17
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This research assesses the effects of choice alternatives on the travel destination decisions of travelers. The decoy effect involves the addition of a new inferior alternative into a choice set, t...
#1Choongbeom Choi(UNLV: University of Nevada, Las Vegas)H-Index: 9
#2Anna S. Mattila(PSU: Pennsylvania State University)H-Index: 81
The relative use of an internal reference price (IRP) versus an external reference price (ERP) becomes an important issue in the travel and lodging contexts as the increased promotional activity by destinations and hotels is likely to be based on price-comparison advertisements. However, there is little guidance on how tourism and hospitality organizations can use pricing structure to influence reference price, which is cardinal to travelers’ evaluation of price acceptability. Thus, the current ...
Last. Roger Marshall(AUT: Auckland University of Technology)H-Index: 21
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Consumers often find themselves challenged by the conflicting desires to seek uniqueness versus conformity, and thus seek some degree of balance. In a series of six studies we show that presenting each options’ product-related information in a unique color, as opposed to all product-related information presented in black-on-white, partially satiates the desire for uniqueness, thus amplifying the compromise effect. Consumers facing color presentation formats choose the middle, conforming option m...
The study measured the extent to which the 1 through 9 digits were used as price endings by suppliers of five tourism services in three different cultures represented by New York City, Seoul, and Shanghai. Four results emerged. The first confirmed the hypothesis, but the other three results were contrary to expectations. First, 9 and 8-ending prices were dominant in New York City and in Shanghai, respectively. Second, these culture specific endings were complemented by the universality of the 0 ...
Last. Kuo-Hao Lan(CCU: National Chung Cheng University)H-Index: 1
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Research in psychology finds strong context effects in consumer behavior and help consumer make up their mind from choice set when none of each option better than the others in all aspects. Context effect signifies that when evaluating a focal option, individuals take into consideration characteristics of other comparative alternatives rather than only the features of that focal alternative, complicating the decision-making process. The compromise effect and attraction effect (known together as ...
This research shows that making a precise (vs. round) offer in a negotiation may lead to diverging outcomes. On the one hand, past literature has demonstrated a precision advantage wherein offer precision reduces the amount by which offer recipients counter. On the other hand, building on the notion that round numbers symbolize completion and previous findings that individuals tend to set goals at round numbers, we hypothesize a roundness advantage wherein offer roundness increases the bargainer...
#1Jungkeun Kim(AUT: Auckland University of Technology)H-Index: 16
Abstract The current research examines how different types of information representation mode (graphical vs. numerical) influence the compromise effect. We posit that the compromise effect will be relatively stronger in the graphical versus numerical information presentation mode. Four empirical studies reported in this research provide the following: (1) support for these predictions, (2) the moderating role of time pressure, and (3) the moderating role of explicit relational information for th...
Abstract We investigate COVID-19 related consumers’ donation intent predicated on their political ideology and the message frame - one emphasising the statistical number of affected victims, and the other focusing on a specifically identified victim. Across three studies, we find that the impact of the message frame depends on consumers’ political ideology. Politically conservative consumers respond to the identifiable victim (vs. statistical victims) frame more favorably while politically liber...