The Influence of Consumer=S Price Expectations on Value Perception and Purchase Intention

Citation:

Kyoung-Non Kwon and David W. Schumann (2001) ,"The Influence of Consumer=S Price Expectations on Value Perception and Purchase Intention", in NA - Advances in Consumer Research Volume 28, eds. Mary C. Gilly and Joan Meyers-Levy, Valdosta, GA : Association for Consumer Research, Pages: 316-322.

Advances in Consumer Research Volume 28, 2001     Pages 316-322

THE INFLUENCE OF CONSUMER=S PRICE EXPECTATIONS ON VALUE PERCEPTION AND PURCHASE INTENTION

Kyoung-Non Kwon, University of Tennessee

David W. Schumann, University of Tennessee

Price promotion has become an integral part of American culture. In recent times marketers have been increasing the use of price promotion by strategically cutting budgets for traditional advertising. This has resulted in greater price/promotion sensitivity on the part of consumers (Mela, Gupta and Lehmann 1997). As consumers are more frequently exposed to price promotion, an interesting research question persists. How do consumers come to a conclusion regarding price and what is this conclusion based upon?

It is commonly known that consumers form their own price expectations based on pricing patterns they have observed over time (Jacob and Obermiller 1989,1990; Kalwani et al. 1990; Kalwani and Yim 1992; Krishna 1991, 1992, 1994; Mela and Urbany 1997; Winer 1986). Consumers appear to develop personal forecasting rules for price. Furthermore, a consumer’s purchase decision may depend on what kind of price expectation exists. For example, if a promotion for a discounted price is run frequently, consumers may adjust to the lower price and may be adverse to paying the normal price when the promotion ceases. Moreover, when a shopper encounters a sales promotion, (s)he might not respond positively if (s)he has a specific anticipation of a further price drop. In this situation, the price discount may not increase actual purchases as intended. Consumers observe prices and obtain price information from various sources, from which they develop decision rules. Thus, the price expectation may alter the purchase behavior in either way, accelerating towards or deferring from the current purchase.

Over the past two decades there have been several studies that specifically explored the notion of consumer price expectation through modeling approaches (Helsen and Schmittlen 1992; Kalwani et al. 1990; Mayhew and Winer 1992; Winer 1986) or experiments (Jacobson and Obermiller 1989, 1990; Kalwani and Yim 1992; Krishna 1994). However, as these studies only examined purchase decision or actual response to sales, they have been limited in providing an adequate description of how the price expectation influences the current purchase decision. To date, there has been little direct examination of the role that expected future price plays in the current purchase decision. These researchers have called for further study of pricing that tps into the "forward looking" (Jacobson and Obermiller 1989, 1990) concept of expected price. That is, at the point-of-purchase, do consumers actively assess the gain or loss of buying a product, in part, based upon their expectation of the product’s future price?

The study reported here explores the notion of #forward looking’ expected price, termed expected future price (EFP). We examine the impact of EFP on current purchase intention and the value perceptions, i.e., acquisition value and transaction value, as antecedents of the intention. This study also explores the impact of a potential moderating factor, the credibility of EFP information.

REVIEW OF LITERATURE

Consumer response to a price promotion depends on the evaluation of the promotion in light of the reception of benefit or utility associated with the purchase. This corresponds to the notion of "value." Understanding the value customers seek becomes the core within the pricing strategies of both manufacturers and retailers. Zeithaml (1988) defines perceived value as "the consumer’s overall assessment of the utility of a product based on perceptions of what is received and what is given." Monroe (1990) views customer value as "a consequence of evaluating perceived quality and benefits in the product or service and perceived cost of acquiring and using them." As such, value is defined as the trade-off between benefits, i.e., the "get" component, and sacrifices, i.e., the "give" component (Woodruff and Gardial 1996).

Several researchers have argued that the total perceived value of a product being considered for purchase is further broken down into two categories: acquisition value and transaction value (Grewal, Monroe and Krishnan 1998; Lichtenstein, Netemeyer and Burton 1990; Monroe 1990; Monroe and Chapman 1987; Thaler 1983, 1985; Urbany et al. 1997). Acquisition value is the expected benefit to be gained from acquiring the product compared to the net cost of paying for it (Thaler 1985). It can be thought of as the difference between the price one would pay for acquiring a product of this quality and the current price. Transaction value comes from the feeling of having received a good bargain or deal, which is independent of quality consideration (Thaler 1983, 1985). Buyers are thought to experience pleasure from the fact they buy the product at a price less than the regular price, and/or less than the price of other similar products in the store (or another store). The total value received by the purchaser is thought to be the sum of acquisition value and transaction value, both of which are considered antecedents to actual purchase behavior.

This value perception comprised of acquisition and transactional value, is the output from evaluating the current deal against some standard or reference prices (Grewal, Monroe and Krishnan 1998; Monroe1990; Monroe and Chapman 1987; Thaler 1983, 1985; Zeithaml 1988). Consumers do not have an absolute response to pricing, rather their response is related to one or more reference prices. Although different terms are used to refer to reference price, e.g., fair price, reservation price, value equivalent price (Thaler 1983, 1985) and maximum acceptable price (Monroe 1990), the consensus is that consumers use various kinds of reference price as a standard to evaluate acquisition value and/or transaction value. Four judgmental theories from psychology can be used to explain the logic of reference price. These include prospect theory (Kahnema and Tversky 1979), mental accounting (Thaler 1985), adaptation level theory (Helson 1964), and assimilation-contrast theory (Sherif 1963). The first two suggest that consumers may perceive the current price/deal as a loss or a gain, relative to their reference price. The latter two would posit that a new price can be assimilated in order to update the reference price or it can be rejected, both situations affecting the reference price.

Although the notion of price expectation as another reference price has been introduced in the literature, e.g., expected future price (Winer 1986), last price paid, and going price (modal price from the buyer’s historical experience - Morris and Morris 1990), the consumer’s price expectation has not been a focal point of research. Among the few studies, there are several that have taken a modeling approach to estimate expected price. This modeling approach has employed various scanner data such as a brand’s last period prices, frequency of promotion, and price trend (Kalwani et al. 1990; Helsen and Schmittlen 1992; Mayhew and Winer 1992; Winer 1986). The previous research generally suggests that a model incorporating the concept of price expectation provides better predictive power for brand choice and purchase decision. This result is attributed to the fact that sellers set price based on historical price levels and accordingly, consumers develop their expectations (Briesch et al. 1997). As such, the most often employed technique to operationalize expected price has been an estimation approach using scanner data.

However, this estimation method has a limitation in demonstrating how consumers’ expectations of the future price actively influence current purchase behavior. This limitation was discussed by Jacobson and Obermiller (1989, 1990) as they introduced the conceptual difference between expected prices as backward-looking and forward-looking. The early studies conceptualized expected prices as if consumers were looking back at the past rather than looking forward to a future price. Thus research did not take into consideration the potential for a consumer’s conscious and active anticipation of future price. A forward-looking expected price is part of the active price anticipation that derives its basis from 1) the buyer’s knowledge about past prices, 2) current market prices, and 3) the expectation of future price. All three are important to consider in attempting to identify and understand the consumer’s interpretation of the current deal. This paper presents a study that examines the role of the least explored of the three pricing considerations listed above, expected future price (EFP).

A few studies have employed the concept of EFP as the forward-looking strategy. Expected future price taps into what consumers think they will have to pay for a product in the future (Jacobson and Obermiller 1990; Kalwani and Yim 1992; Krishna 1994). These researchers conducted experiments and measured the concept of forward-looking expected price by asking subjects their expected price (Jacobson and Obermiller 1990; Kalwani and Yim 1992), and by providing information on future price deals. However, these studies only tested the impact of future expected price on the final purchase decision or brand choice, they did not provide insight into how this expectation influences the purchase decision.

RESEARCH OBJECTIVES AND HYPOTHESES

This study investigates the impact of consumers’ expectation of future price (EFP) on the response to a discounted price promotion. The purpose of this study is threefold: 1) to examine the effect of consumers’ EFP on current purchase intention and on the value perception as an antecedent of the intention, 2) to test the asymmetric nature of EFP in the situations where EFP is greater than, equal to, or less than a current discounted price, and 3) to explore the effect of credibility of EFP information as a possible moderating factor.

In this study, EFP is considered as it may relate to a current deal price (CDP). As such, there are three possibilities: 1) EFP is greater than CDP (EFP>CDP), where consumers’ expectation of the future price exceeds the current price, 2) EFP is same as CDP (EFP=CDP), where no price change is expected in the future, and 3) EFP is less than CDP (EFP<CDP), where further price decrease is expected in the future. As suggested in the literature (Winer 1992), EFP may act as another reference point for price, with consumers using multiple reference points for a purchase decision. If EFP is used as another reference point, then when EFP>CDP, consumers are more likely to make an immediate purchase. Thus the present perceived value should be better, and purchase intention should be more likely, than when EFP=CDP or when EFP<CDP. Conversely, when EFP<CDP, the consumer has to weigh the fact that the future price will be less than what is being charged presently. In this case, the value perception and purchase intention are expected to be diminished compared to when EFP>CDP or when EFP=CDP. The following hypothesis is offered below.

Hypothesis 1. Those individuals who expect a future price decrease (EFP<CDP) are likely to perceive diminished acquisition and transaction value, and are less likely to purchase the product compared to those expecting no price change (EFP=CDP) or those individuals who expect an increase in future price (EFP>CDP). Furthermore, those expecting no price change (EFP=CDP) are likely to perceive diminished acquisition and transaction value, and are less likely to purchase the product compared to those individuals expecting an increase in future price (EDP>CDP).

However, the magnitude of difference between EFP=CDP and EFP>CDP, and EFP=CDP and EFP<CDP, may not be symmetric. There are several studies that have explored an asymmetric response to price change. It is generally believed consumers respond to price increase more sensitively than price decrease. Uhl and Brown (1971) conducted a survey in which customers were asked to indicate how they would respond to price increases and decreases of 5%, 10% and 15%. The authors reported that customers were considerably more sensitive to price increases than to decreases.

Kalwani et al. (1990) tested the hypothesis of asymmetry in customer response to positive deviations (losses) and negative deviations (gain) of the retail price from the expected price. Customers were found to react more strongly to price losses than to price gains. Kalwani and Yim (1992) found that, compared to the effect of the presence of a promotional deal when one was not expected, the absence of a promotional deal when one was expected had a significant impact on consumer brand choice.

The literature suggests a consumer’s response to price promotion may be asymmetric in a loss versus a gain, depending on one’s expectations. Following Prospect Theory (Kahneman and Tversky 1979), if negative and positive deviations of the current deal price from the EFP are taken to represent perceived gains and losses the response to a positive price deviation (loss) is likely to be stronger than the response to a negative price deviation (gain). Regarding the relationship between EFP and CDP, the following hypothesis is proposed:

Hypothesis 2. For perceived transaction value, perceived acquisition value, and purchase intention, the difference when expected future price is less than the current deal price (EFP<CDP and EFP=CDP) will be greater than the difference when the expected future price is more than the current deal (EFP>CDP and EFP=CDP).

Intuitively it makes sense that the credibility of EFP information should serve as a moderating factor in the relationship between EFP and value perception/purchase intention. It is likely that the credibility of EFP information increases the current value perception and purchase intention when EFP>CDP. On the other hand, when EFP<CDP, the credibility will stimulate the consumer’s loss perception regarding current price, and consequently it will likely lower the value perception and purchase intention. That is, when the EFP information is credible, the reliance on the EFP is greater, and the value perception and the current purchase intention will likely drop further. When EFP=CDP, customers expect no further price discount in the future, the information credibility may convince them that the current deal is as good as the future one, thus increasing the consumer’s confidence. This confidence is expected to contribute to the perceptions of both acquisition and transaction value, and lead to greater likelihood of purchase.

Hypothesis 3. The credibility of EFP information will moderate the relationship between value perceptions/current purchase intention and EFP. Scores in the perception of acquisition value and transaction value and the current purchase intention are likely to be higher under the credible condition versus the non-credible condition when EFP is higher than the current deal price (EFP>CDP), or equal to the EFP price (EFP=CDP). The opposite is expected when expected future price is lower than current deal price (EFP<CDP).

The main effect predicted in H1, the asymmetric effect predicted in H2, and the moderating effect predicted in H3 are reflected in Figure 1 above.

FIGURE 1

HYPOTHESIZED RELATIONSHIP OF EFP AND THE CREDIBILITY OF EFP INFORMATION AS IT PREDICTS PERCEIVED TRANSACTION / ACQUISITION VALUE, AND CURRENT PURCHASE INTENTION

METHODOLOGY

Study Design Manipulations

A 3 (EFP>CDP; EFP=CDP; EFP>CDP) x 2 (credible versus non-credible EFP information) between-subjects design was employed in this study. For the first factor, expected future price (EFP), brief summaries of fictitious magazine inserts were generated. Subjects were shown a magazine cover along with a page that included an insert with EFP information. The information reported that for this product class, expected future price would, in three months, be 15% less than today’s regular price, 30% less than today’s regular price, or 45% less than today’s regular price. Subjects were also given information that stated, given this brand, exactly what this discount would mean in terms of savings or loss comparing CDP and EFP.

The second factor, the credibility of EFP information, was manipulated through the same magazine insert described above. Two magazines were employed: a popular computer magazine and a popular women’s fashion magazine. For credible EFP information, the insert from the computer magazine contained the reported announcement of a future price change as stated by the CEO of the computer monitor company. The insert from the women’s fashion magazine reported the result of a random survey on the perceived change of price for computer monitors. The survey reported in the fashion magazine was conducted at a department store in a metropolitan area with a sample size of fifteen department store shoppers (non-credible EFP information).

Procedures

A computer monitor was selected for the experiment because the product occasionally is marked down, so it would be realistic for expected future price to be considered in this high involvement context. A hypothetical brand of computer monitor was used to minimize the potential respondents’ tendency to invoke an image or previous experience.

One hundred ninety-nine undergraduate students participated in the experiment. Participants were randomly assigned to one of the six conditions. After excluding 6 respondents who did not finish the questionnaire booklet and 13 respondents who did not correctly recall the price information provided, responses of one hundred eighty subjects were used in the analysis.

Respondents received a booklet containing all the experimental material. The first page contained the name and picture of the monitor marked "30% Off." In addition, the regular price of $875.99 was crossed out and the discounted price of $613.19 was underlined. On the lower half of the page, respondents were asked to imagine they were in the market for a new computer monitor, having typically purchased computer monitors separate from their basic computer. They were told that when they entered the store they would find a sale for the monitor marked down 30%. They were reminded of, and were referred to, a Consumer Reports test that rated this brand as one of the best choices within the $500-$1000 price range. They were told that they had set their personal budget around $800. On the second page the respondents were provided with a page ut of Consumer Reports with a copy of a blown up, fictitious table comparing five different brands on some key attributes. The results of this table reflected that this brand was better than or equal to the other brands listed on the table. The attributes included price, overall score (Poor, Fair, Good, Very Good, Excellent), image quality, ease of use, viewable image size, and maximum resolution. The purpose of the information from Consumer Reports was to minimize the possible confounding effect of quality certainty on the value perceptions and purchase intention due to respondents’ different quality perception. Urbany et al. (1997) reports the moderating effect of quality certainty in the relation of transaction value and purchase intention. The first two pages in the booklet were the same for everyone. The manipulation of EFP and the credibility of EFP information as previously described above, appeared on the third page. The remainder of the booklet contained the questionnaire.

Measures

Perceived transaction value and acquisition value were measured using twelve statements adapted from Grewal et al. (1998). Three items that supposedly measured transaction value and nine items that supposedly measured acquisition value were anchored at 9-points from "strongly disagree" to "strongly agree" (Grewal et al. employed 7-point scales). The sum of the scores on these items was used in the analysis. To measure purchase intention, two questions were used. One asked the likelihood of purchasing the monitor and it employed a 9-point scale anchored with "very unlikely" and "very likely." The other question asked their intention in terms of probability of purchase voiced in percentage (e.g., 70% likely). They were left a blank space to fill in the percentage. As the two questions used different scales, standardized scores of the two items were used for purchase intention. The sum standardized score was employed in the analysis.

RESULTS

Manipulation Check

A manipulation check was conducted to assess if the credibility of the EFP information was perceived significantly different between the kinds of information: the announcement of the corporate CEO of the brand under consideration cited in the computer magazine and the result of a small consumer survey reported in the woman’s fashion magazine. The sum of three items (9-point semantic differential scales assessing dependability, reliability, and trustworthiness) were employed in the manipulation check of credibility. Those respondents who reviewed the computer magazine information perceived it as more credible (mean = 20.133) compared to those respondents who reviewed the study appearing in the women’s fashion magazine (mean=11.011), F(1,179) = 205.005, p = .000. In addition,whether information from a particular magazine was perceived more credible by a specific gender due to the familiarity or the readership of the magazine (i.e., fashion magazines to females) was tested. For the both fashion and computer magazines, there were no significant gender differences found for information credibility.

Subjects were asked to answer a series of questions for the manipulation check of EFP. They were asked to recall CDP and EFP in the information they reviewed in the dollar term and percentage. If a respondent answered the questions correctly, (s)he had an idea how the price would change in relation with the current deal price. In order to assess the true consequences of EFP, it was mandatory that subjects understood all the pricing information provided. Among the total 199 subjects, 13 recalled information incorrectly and were excluded from the analyses.

Factor Analysis on Value Perceptions

A factor analysis was conducted on the 12 items purported by Grewal et al. (1998) to measure perceived transaction and acquisition value. The factor analysis revealed some overlap with Grewal et al., but also some differences. Two of the original three transaction value items loaded highly on one factor while the third item loaded poorly and was discarded ("Beyond the money I save, taking advantage of this price discount will give me a sense of joy."). Eight of the nine original acquisition value items loaded highly on one factor. The one poorly loading item ("Compared to the maximum price I would be willing to pay for this monitor, the discounted price conveys good value.") loaded highly on the transaction value factor. After considering the face validity of the item, it was decided to retain it under transaction value rather than acquisition value. Thus with the exception of this one item that loaded highly on transaction value and the discarded item, all of the remaining items from the Grewal et al. index loaded in a similar fashion in this study.

Results of MANOVA

A MANOVA with appropriate contrasts was conducted with the three dependent variables: perceived transaction value, perceived acquisition value and the current purchase intention. The initial MANOVA included EFP, the credibility of EFP information and the interaction. The multivariate effect was significant for EFP (Wilks’ Lambda = .882; F(6) = 3.663, p = .002) and for credibility (Wilks’ Lambda = .948; F(3) = 3.070, p = .029). The multivariate interaction effect of EFP*Information Credibility was not significant. The multivariate main effect revealed that EFP influenced both perceived acquisition value, F(2) = 3.900, p = .022 and purchase intention, F(2) = 6.697, p = .002. It also appealed that Information Credibility affected current purchase intention, F(1) = 6.638, p = .011.

Hypothesis 1 predicts a main effect for EFP. The results of the MANOVA test provide support for the hypothesis for two of the three dependent variables. For perceived transaction value, planned contrasts tests revealed a significant difference between EFP=CDP and EFP<CDP (p = .041) (Please see Figure 2). However, there was no difference between EFP=CDP and EFP>CDP. The same difference was found for acquisition value (p = .010). Both perceived transaction value and acquisition value seemed to be significantly diminished when subjects expected a further price drop than when they expected no price change in the future. For purchase intention the significant drop in likelihood of purchase occurred between EFP>CDP and EFP=CDP (p = .022). In this case, while the slope continued downward as expected price decreased, there was no significant difference between EFP=CDP and EFP<CDP. Purchase intention appears likely to be greatest when one anticipates a future price increase than when one does not expect a change or expects a drop in price. Therefore the results of te MANOVA with contrasts tests partially support Hypothesis 1. The expectation of future price appears to have the potential to influence both perceived value and purchase intention.

The asymmetric effects for perceived transaction value, perceived acquisition value and purchase intention (Hypothesis 2) were examined using the results of the planned contrasts used in testing Hypothesis 1. For perceived transaction and acquisition value, it was found there was no difference between the first two levels (EFP>CDP and EFP=CDP), but a difference emerged between EFP=CDP and EFP<CDP (please refer to Figure 2). Therefore it is concluded that H2 has partial support. What emerged in the analysis of purchase intention was counter to what was predicted. In this case, the significance was found between EFP>CDP and EFP=CDP and not between EFP=CDP and EFP<CDP. Thus while some indication of the asymmetric effect exists for both the value perceptions and purchase intention, for the latter, the asymmetric effect is opposite to what was predicted.

Hypothesis 3 predicted the moderating effect of the EFP information credibility (as represented in Figure 1). Planned contrast tests showed that there were significant differences due to credibility under certain comparison conditions (see Table for means). For transaction value, when no price change was expected, the perception was marginally different between the two credibility levels; the perception of transaction value was somewhat greater when it was based on a credible EFP information (p = .077), while there was no difference found between the two credibility levels when further price decrease or increase were expected. There was no support for credibility serving as a moderator in the analysis of acquisition value (at all three EFP levels). However, further suggestion of the moderating influence of credibility did surface. The main effect difference found for Hypothesis 1 for both perceived acquisition and transaction value must be viewed in light of the further planned contrasts. For both measures of value, the main effect difference found between EFP=CDP and EFP<CDP was shown through planned contrasts tests to only exist under the high credible source conditions (p = .008). In addition, a significant difference in transaction value emerged between EFP>CDP and EFP=CDP (p = .048) under the high credibility source condition. Interestingly, this difference was in the opposite direction from what was hypothesized. No main effect for EFP was forthcoming when credibility of the source was low.

When the price expectation was based on the credible information, purchase intention was significantly less than when it was based on less credible information when EFP<CDP (p = .013), and marginally less when EFP=CDP (p =.075). The latter effect, EFP=CDP, was found to be in the opposite direction from what was hypothesized, with purchase more likely when the non-credible information was employed. No difference was found between the two credibility conditions when EFP>CDP. While Hypothesis 3 was not fully supported, the planned contrasts did reveal the potential for information credibility to play a moderating role. As in the value perception result, the main effect found in Hypothesis 1 was moderated by the credibility of the EFP information. The significant main effect found for the difference between EFP>CDP and EFP=CDP was present only under the high credibility conditions.

FIGURE 2

ESTIMATED MARGINAL MEAN DIFFERENCES IN EFP CONDITION

DISCUSSION

This study sought to consider the influence of expected future price on a current purchase decision. The results of the experiment presented here revealed support for the notion that expected future price does potentially influence perceived value as well as current purchase intention. Furthermore, the planned comparisons reflect the potential moderating role that EFP information credibility can play.

Transaction value can be thought of as a difference between the desired price to pay and the current price offered. It is very much related to how one feels about the deal. Is it a bargain or is it a "rip-off?" The results in this study provide both, support for the predictions, as well as some evidence counter to the predictions. In this study, it appears there is a significant drop in transaction value from EFP=CDP to EFP<CDP. In addition, the credibility of information appeared to moderate the relationship. Under the low information credibility condition transaction value was the same across EFP conditions. However, when EFP=CDP, the high credibility condition respondents perceived significantly stronger transaction value than the low credibility respondents. It appears that, when no change in price is expected, the credible information encourages greater transaction value than does a less credible information. Respondents seem to attend to, and feel confident in credible information whereas this confidence seems to be missing with non-credible information. Thus, the confidence gained from credible information justifies the beliefs about the deal when EFP=CDP. Non-reliable information may undermine that confidence, thus reducing the value of transaction. The transaction value also appears to be reduced when highly credible information suggests that the future price will be higher (compared to when this source suggests that the future price will be the same). Perhaps in this case the credible information seems contrary to the industry norm. In the computer industry, it is the standard for hardware to decrease price significantly over time, not increase. This may have led to a strong degree of skepticism towards the source and the deal.

Acquisition value can be thought of as the difference between the price one would pay for acquiring a product of this quality and the current price offered (Thaler 1983, 1985). First, the same drop in future price reported for perceived transaction value was also found for perceived acquisition value, that is respondents recorded diminished transaction value from EFP=CDP to EFP<CDP. Respondents who were given information about the potential drop in prices rated acquisition value as significantly lower than when no expected drop in price was expected. It is important to note that this effect is moderated by the information credibility. This relationship only emerges for those who received the credible EFP information. With non-credible information, no difference exists between the perceived acquisition value for all three EFP conditions. Thus when one is exposed to credible information promoting a decrease in future price, the value of acquiring the product in the future, may be higher in the consumer’s mind than acquiring it under the present price offering.

TABLE 1

ESTIMATED MARGINAL MEANS EFP BY INFORMATION CREDIBILITY

Contrary to the results of transaction and acquisition values, respondents showed diminished purchase intention from EFP>CDP to EFP=CDP, while there is no significance found between EFP=CDP and EFP<CDP. The insignificant result may be related to the ecological issue of technology products. [The authors appreciate and agree with one of the reviewer=s suggestion for the possible explanation why the insignificant result occurred.] A consumer may experience cognitive dissonance associated with buying an out-dated monitor at a future time, if (s)he believes that a price drop is due to the introduction of a new improved model. In this case, the consumer may not postpone the purchase, even though further price decline is expected in the future.

The relationship of EFP to current purchase intention was also moderated by information credibility. While there were no differences for EFP under the low credibility conditions, purchase intention was affected under the high credibility conditions. As EFP went from greater than to equal to CDP, intention to purchase decreaed significantly, but only when information credibility was high. However, while the difference in credibility was predicted at EFP<CDP, the expected effect did not emerge. Thus when EFP=CDP, the low credibility condition respondents voiced a higher likelihood to purchase than those respondents exposed to the high credibility information. Again, this was counter to the hypothesis offered and it is difficult to think about why this might have happened. Replicating this finding would be important and it is suggested that experimenters take cognitive response thought listings to better understand these potential differences.

The predicted asymmetric effect emerged for value perceptions but interestingly, not for purchase intention. In fact, Kalwani and his colleagues (1990, 1992) found an asymmetric effect for purchase decision in a similar direction to that hypothesized in this study. Thus, finding the opposite type of asymmetry in this study raises a question for future research. Again, employing cognitive response thought listings may shed light on the answer.

Future Research

The perception of acquisition value is the result of the quality perception of the product compared to a current price. Conceptually, the question why EFP as a reference price affects acquisition value in addition to transaction value raises. One of the possible explanations would be that, for example, transaction and acquisition values are not completely independent constructs, therefore the effect of EFP on transaction value might be carried over to the perception of acquisition value. This research question should be pursued by structural equation modeling.

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