The Impact of Price Disclosure on Dynamic Shopping Decisions

Benedict G.C. Dellaert, Vladislav Y. Golounov and Jaideep Prabhu
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Jaideep Prabhu: METEOR

No 6, Research Memoranda from Maastricht : METEOR, Maastricht Research School of Economics of Technology and Organization

Abstract: A potentially powerful way to assist consumers in making dynamic shopping decisions is to disclose price information to them before they shop, for example by posting prices on the Internet. This paper addresses the differential impact of disclosing either only current, or both current and future prices, on consumer shopping decisions in multi-period tasks involving multiple product purchases. In the context of an Internet-based experiment, we find that consumer expenditure deviates more strongly from that of a normative model when both current and future prices are disclosed than if only current prices are disclosed. We investigate the behavioral effects underlying this finding by estimating a model that allows for variations in consumer discounting, strength of store price format preferences, as well as choice consistency between different price disclosure conditions.

Keywords: marketing (search for similar items in EconPapers)
New Economics Papers: this item is included in nep-bec, nep-cbe and nep-exp
Date: 2005
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Journal Article: The Impact of Price Disclosure on Dynamic Shopping Decisions (2005)
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Persistent link: http://EconPapers.repec.org/RePEc:dgr:umamet:2005006

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