Anchors in Range Pricing: How Do Consumers Choose What to Pay?

Annie Peng Cui, West Virginia University, USA
Jennifer Wiggins Johnson, Kent State University, USA
How do consumers decide what price to pay when they are asked to choose a price within a range of acceptable prices? We suggest that consumers interpret the price range as a range estimate reference price. We show that consumers perceive the endpoints of the range as external anchors and adjust their willingness to pay in the direction of both anchors. In addition, the introduction of a midpoint into the price range increases the likelihood that consumers will choose the midpoint as their price. We further show that different consumers rely more heavily on different anchors in their pricing decision.
[ to cite ]:
Annie Peng Cui and Jennifer Wiggins Johnson (2010) ,"Anchors in Range Pricing: How Do Consumers Choose What to Pay?", in NA - Advances in Consumer Research Volume 37, eds. Margaret C. Campbell, Jeff Inman, and Rik Pieters, Duluth, MN : Association for Consumer Research, Pages: 782-782 .