A Reference Price Effect of Buy-Now Prices in Internet Auctions

Retailers selling items through Internet auctions frequently use buy-now prices (BNPs), which allow the selling of items immediately to consumers at a fixed price. We propose and estimate a new model of the reference price effects of BNP on bidders’ willingness-to-pay (WTP) in online auctions. We also study under what conditions a BNP can be effectively used as an external reference price (ERP). Results of two experiments clearly indicate that BNPs have a reference price effect. We find, however, that this effect is moderated by (1) the ease of value assessment and (2) product class (i.e. low versus high-end products).



Citation:

Peter Popkowski Leszczyc, Chun Qiu, and Yongfu He (2008) ,"A Reference Price Effect of Buy-Now Prices in Internet Auctions", in LA - Latin American Advances in Consumer Research Volume 2, eds. Claudia R. Acevedo, Jose Mauro C. Hernandez, and Tina M. Lowrey, Duluth, MN : Association for Consumer Research, Pages: 137-138.

Authors

Peter Popkowski Leszczyc, University of Alberta, Canada
Chun Qiu, McGill University, Canada
Yongfu He, University of Alberta, Canada



Volume

LA - Latin American Advances in Consumer Research Volume 2 | 2008



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