Price framing

Steffen Huck, Julia Schmid and Brian Wallace

Discussion Papers, Research Unit: Economics of Change from WZB Berlin Social Science Center

Abstract: We present a laboratory experiment on the impact of price framing on consumer decision making. Consumer subjects face a search market where two sellers offer a homogenous good. We examine six different price frames with linear per-unit pricing (that is displayed as such) serving as a benchmark. We find that all frames deviating from the benchmark have some negative impact on consumer decision making. The most striking result concerns drip pricing (where prices are decomposed into three elements and dripped in during the purchasing process). While leaving the actual decision problem unchanged, drip pricing wipes out 25% of consumer surplus.

JEL-codes: C72 C92 D21 D43 (search for similar items in EconPapers)
Date: 2013
New Economics Papers: this item is included in nep-com, nep-exp and nep-mkt
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Persistent link: https://EconPapers.repec.org/RePEc:zbw:wzbeoc:spii2013314

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