The Framing Effect of Price Format

Marco Bertini, London Business School
Luc Wathieu, Harvard Business School
While evidence suggests that preferences are affected by whether a price is presented as one all-inclusive expense or as a series of mandatory charges, the direction of this effect remains ambiguous. To reconcile these differences we propose a simple psychological mechanism that links prices to the salience of product benefits. We report evidence from three studies that consistently support the general hypothesis that price format acts as an incentive to process product information and determines how many attributes are accessed at the time of valuation. This theory ultimately suggests that pricing may impact perceived value as much as capture it.
[ to cite ]:
Marco Bertini and Luc Wathieu (2007) ,"The Framing Effect of Price Format", in NA - Advances in Consumer Research Volume 34, eds. Gavan Fitzsimons and Vicki Morwitz, Duluth, MN : Association for Consumer Research, Pages: 405-408.