Knowledge that Transforms

Journal Article Volume 32 Author Index Get access Journal of Consumer Research, Volume 32, Issue 4, March 2006, Pages 603–611, https://doi.org/10.1086/515844 Published: 01 March 2006

Journal Article Volume 32 Subject Index Get access Journal of Consumer Research, Volume 32, Issue 4, March 2006, Pages 612–614, https://doi.org/10.1093/jcr/32.4.612 Published: 01 March 2006

Are consumers more likely to purchase an item from an assortment in which options are priced at parity or from an assortment in which options vary in price? This research examines the influence of parity-pricing and differentiation-pricing strat-egies on consumer choice and identifies conditions in which parity pricing facilitates choice, as well as conditions in which choice is facilitated by differential pricing. In a series of three experiments, the impact of assortment pricing on choice is shown to be a function of the uncertainty associated with consumers ’ preferences and the consistency of these preferences with options ’ prices. When launching a new product line, managers oftenface the question of whether to price products at parity or to let the pricing vary as a function of other factors such as the actual cost or the anticipated demand for each product. To illustrate, a restaurant could price all the options on its dessert menu the same, or, alternatively, it could let the pricing reflect the actual cost of making each dessert. A wine manufacturer could price different wine varietals at

Do consumers prefer auctions that allow them to place more precise bids to auctions that accept less precise bids? Can consumers accurately estimate their need for price-elicitation precision? This research addresses these questions by applying the notion of compatibility to the relationship between consumers ’ bidding price uncertainty and the precision implied by the price-elicitation task. Data from four experiments show that when consumers are uncertain about the optimal bidding price, decision tasks requiring elicitation of precise bids lead to lower decision confidence, and vice versa. It is further shown that consumers display stronger preference for high-precision auctions, even though such auctions are associated with less confident pricing decisions. Most of the extant consumer research has examined decision environments in which prices are readily available to buyers. In this context, typical research questions address issues such as how consumers evaluate, encode, and store the price information; how they infer missing