HOW DOES DECOY PRICING AFFECT PURCHASING DECISIONS?

Lea Kubíčková, Lucie Veselá, Marcela Kormaňáková and Ekaterina Veverková
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Lea Kubíčková: Mendel University in Brno, Czech Republic
Lucie Veselá: Mendel University in Brno, Czech Republic
Marcela Kormaňáková: Mendel University in Brno, Czech Republic
Ekaterina Veverková: Mendel University in Brno, Czech Republic

Studies in Business and Economics, 2023, vol. 18, issue 3, 176-197

Abstract: This paper is devoted to the cognitive biases of decoy pricing, which has become the subject of interest of retail companies in recent years. The paper analyses the principles of the decoy effect with regard to consumer behaviour in the Czech Republic (which represents customers of the Eastern Europe). The analytical part of the paper focuses on examination of often irrational consumer decision-making process, with respect to age, gender, product group, and other factors. A combination of questionnaire survey (N=200) and interviews (N=32) was used. The results indicate a significant influence of the generation the consumer belongs to, further differences in decision-making according to gender, as well as differences in effects in various product categories. The findings may be utilised by companies considering the use of decoy pricing strategies in the Czech market.

Keywords: Decoy pricing; purchase decision; cognitive bias; pricing (search for similar items in EconPapers)
Date: 2023
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