The framing effects of multipart pricing on consumer purchasing behavior of customized information good bundles

Applying behavioral economic theories, we hypothesize that consumers have sticky reference prices for individual information goods, but their perceived value for customizable bundle offers can be significantly influenced by the framing of a multipart pricing scheme. The potential impacts of these fr...

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Main Authors: Bockstedt, Jesse C., Goh, Kim Huat
Other Authors: Nanyang Business School
Format: Article
Language:English
Published: 2013
Online Access:https://hdl.handle.net/10356/98833
http://hdl.handle.net/10220/17378
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Institution: Nanyang Technological University
Language: English
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spelling sg-ntu-dr.10356-988332023-05-19T06:44:41Z The framing effects of multipart pricing on consumer purchasing behavior of customized information good bundles Bockstedt, Jesse C. Goh, Kim Huat Nanyang Business School Applying behavioral economic theories, we hypothesize that consumers have sticky reference prices for individual information goods, but their perceived value for customizable bundle offers can be significantly influenced by the framing of a multipart pricing scheme. The potential impacts of these framing effects are measurable changes in consumer behavior and sales outcomes. We conducted a series of behavioral experiments and a large-scale natural field experiment involving actual purchases of customized information good bundles to confirm and analyze the hypothesized effects. The results demonstrate a consumer's willingness to purchase a customized bundle of information goods, the size of the resulting bundling, and the consumer's perceptions of the transaction are each significantly influenced by the design of the multipart pricing scheme. These results hold even when the final price and size of a customized bundle are the same across differing schemes. We discuss the potential tradeoffs in economic outcomes that result from price framing (e.g., likelihood of sale versus size of purchased bundles) and the implications for information good retailers. 2013-11-07T06:40:12Z 2019-12-06T20:00:06Z 2013-11-07T06:40:12Z 2019-12-06T20:00:06Z 2013 2013 Journal Article Goh, K. H., & Bockstedt, J. C. (2013). The Framing Effects of Multipart Pricing on Consumer Purchasing Behavior of Customized Information Good Bundles. Information Systems Research, 24(2), 334-351. https://hdl.handle.net/10356/98833 http://hdl.handle.net/10220/17378 10.1287/isre.1120.0428 en Information systems research
institution Nanyang Technological University
building NTU Library
continent Asia
country Singapore
Singapore
content_provider NTU Library
collection DR-NTU
language English
description Applying behavioral economic theories, we hypothesize that consumers have sticky reference prices for individual information goods, but their perceived value for customizable bundle offers can be significantly influenced by the framing of a multipart pricing scheme. The potential impacts of these framing effects are measurable changes in consumer behavior and sales outcomes. We conducted a series of behavioral experiments and a large-scale natural field experiment involving actual purchases of customized information good bundles to confirm and analyze the hypothesized effects. The results demonstrate a consumer's willingness to purchase a customized bundle of information goods, the size of the resulting bundling, and the consumer's perceptions of the transaction are each significantly influenced by the design of the multipart pricing scheme. These results hold even when the final price and size of a customized bundle are the same across differing schemes. We discuss the potential tradeoffs in economic outcomes that result from price framing (e.g., likelihood of sale versus size of purchased bundles) and the implications for information good retailers.
author2 Nanyang Business School
author_facet Nanyang Business School
Bockstedt, Jesse C.
Goh, Kim Huat
format Article
author Bockstedt, Jesse C.
Goh, Kim Huat
spellingShingle Bockstedt, Jesse C.
Goh, Kim Huat
The framing effects of multipart pricing on consumer purchasing behavior of customized information good bundles
author_sort Bockstedt, Jesse C.
title The framing effects of multipart pricing on consumer purchasing behavior of customized information good bundles
title_short The framing effects of multipart pricing on consumer purchasing behavior of customized information good bundles
title_full The framing effects of multipart pricing on consumer purchasing behavior of customized information good bundles
title_fullStr The framing effects of multipart pricing on consumer purchasing behavior of customized information good bundles
title_full_unstemmed The framing effects of multipart pricing on consumer purchasing behavior of customized information good bundles
title_sort framing effects of multipart pricing on consumer purchasing behavior of customized information good bundles
publishDate 2013
url https://hdl.handle.net/10356/98833
http://hdl.handle.net/10220/17378
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