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To Buy or not to Buy? Shrouding and Partitioning of Prices in an Online Shopping Field Experiment

Markus Dertwinkel-Kalt, Mats Köster and Matthias Sutter ()

No 7475, CESifo Working Paper Series from CESifo

Abstract: We examine whether shrouding surcharges or partitioning prices raises demand in online shopping where consumers have very low costs of cancelling an initiated purchase process. In a field experiment with more than 34,000 consumers, we find that consumers in the online shop of a large German cinema initiate a purchase process more often when surcharges are shrouded or indicated separately, but they also drop out more often when the overall price becomes known at the check-out. In sum, the demand distribution is independent of the price presentation. This result qualifies previous findings on the effectiveness of such pricing practices and can be rationalized through low cancellation costs.

Keywords: salience; inattention; shrouding; price partitioning; field experiment (search for similar items in EconPapers)
JEL-codes: D81 C93 (search for similar items in EconPapers)
Date: 2019
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