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Reexamining Latitude of Price Acceptability and Price Thresholds: Predicting Basic Consumer Reaction to Price

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  • Ofir, Chezy

Abstract

Behavioral pricing research has shown consumers to have lower and upper price thresholds, represented by an inverted U-shaped price acceptability function. We propose another basic reaction to price, namely, "lower price is better," represented by a decreasing acceptability function without a lower price threshold. A set of variables is hypothesized to predict consumer reaction to price. Price consciousness, price-quality relation, and product involvement are shown to influence the shape of the price acceptability function. A procedure and model to scale price acceptability and obtain acceptability functions are introduced and applied. The cumulative results suggest reliable acceptability scales along with evidence for convergent and construct validity. Copyright 2004 by the University of Chicago.

Suggested Citation

  • Ofir, Chezy, 2004. "Reexamining Latitude of Price Acceptability and Price Thresholds: Predicting Basic Consumer Reaction to Price," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 30(4), pages 612-621, March.
    • Handle: RePEc:oup:jconrs:v:30:y:2004:i:4:p:612-21
    DOI: 10.1086/380293
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    Cited by:

    1. Inwon Kang & Deokhee Cheon & Matthew Shin, 2011. "Advertising strategy for outbound travel services," Service Business, Springer;Pan-Pacific Business Association, vol. 5(4), pages 361-380, December.
    2. Sharma, Piyush & Roy, Rajat & Rabbanee, Fazlul K., 2020. "Interactive effects of situational and enduring involvement with perceived crowding and time pressure in pay-what-you-want (PWYW) pricing," Journal of Business Research, Elsevier, vol. 109(C), pages 88-100.
    3. Kleinsasser, Sabine & Wagner, Udo, 2011. "Price endings and tourism consumers’ price perceptions," Journal of Retailing and Consumer Services, Elsevier, vol. 18(1), pages 58-63.
    4. Ding, Min & Ross, William T. & Rao, Vithala R., 2010. "Price as an Indicator of Quality: Implications for Utility and Demand Functions," Journal of Retailing, Elsevier, vol. 86(1), pages 69-84.
    5. Kasilingam, Dharun Lingam, 2020. "Understanding the attitude and intention to use smartphone chatbots for shopping," Technology in Society, Elsevier, vol. 62(C).
    6. Lillian L. Cheng & Kent B. Monroe, 2013. "An appraisal of behavioral price research (part 1): price as a physical stimulus," AMS Review, Springer;Academy of Marketing Science, vol. 3(3), pages 103-129, September.
    7. Bonsall, Peter & Shires, Jeremy & Maule, John & Matthews, Bryan & Beale, Jo, 2007. "Responses to complex pricing signals: Theory, evidence and implications for road pricing," Transportation Research Part A: Policy and Practice, Elsevier, vol. 41(7), pages 672-683, August.
    8. Alain De Beuckelaer & Jarl Kampen & J. Van Trijp, 2013. "An empirical assessment of the cross-national measurement validity of graded paired comparisons," Quality & Quantity: International Journal of Methodology, Springer, vol. 47(2), pages 1063-1076, February.
    9. Balabanis, George & Stathopoulou, Anastasia, 2021. "The price of social status desire and public self-consciousness in luxury consumption," Journal of Business Research, Elsevier, vol. 123(C), pages 463-475.
    10. Michel, Géraldine & Stathopoulou, Anastasia & Valette-Florence, Pierre, 2022. "Luxury is still alive and well: A spotlight on its multifaceted components," Journal of Business Research, Elsevier, vol. 153(C), pages 276-284.
    11. Rosa Díaz, Isabel María & Rondán Cataluña, Francisco Javier, 2012. "Determinantes y consecuencias de la efectividad de las promociones basadas en precios," Cuadernos de Gestión, Universidad del País Vasco - Instituto de Economía Aplicada a la Empresa (IEAE).
    12. Muhammad Sabbir Rahman & Ahasanul Haque, 2011. "An Exploratory Study on Malaysian Consumer’s Purchase Intention: Brand, Quality and Price Perspective," Indian Journal of Commerce and Management Studies, Educational Research Multimedia & Publications,India, vol. 2(5), pages 01-11, July.
    13. Hyeong Kim & Thomas Kramer, 2006. "The moderating effects of need for cognition and cognitive effort on responses to multi-dimensional prices," Marketing Letters, Springer, vol. 17(3), pages 193-203, July.
    14. Rashid, Md Sanuwar & Byun, Sang-Eun, 2018. "Are consumers willing to go the extra mile for fair trade products made in a developing country? A comparison with made in USA products at different prices," Journal of Retailing and Consumer Services, Elsevier, vol. 41(C), pages 201-210.
    15. Rabbanee, Fazlul K. & Roy, Rajat & Sharma, Piyush, 2022. "Contextual differences in the moderating effects of price consciousness and social desirability in pay-what-you-want (PWYW) pricing," Journal of Business Research, Elsevier, vol. 141(C), pages 13-25.
    16. Yudha Purbawa & I Gede Mahatma Yuda Bakti & Helena J. Purba & Nidya J. Astrini & Romeyn P. Putra & Sik Sumaedi, 2023. "Acceptable price of packaged palm cooking oil amid scarcity in Indonesia," Journal of Revenue and Pricing Management, Palgrave Macmillan, vol. 22(6), pages 446-454, December.
    17. Yu, Annie Pei-I & Chuang, Shih-Chieh & Cheng, Yin-Hui & Wu, Yi-Chin, 2020. "The influence of sharing versus self-use on the preference for different types of promotional offers," Journal of Retailing and Consumer Services, Elsevier, vol. 54(C).
    18. Qiang Wei & Dong Lv & Yixin Lin & Dongmei Zhu & Siyuan Liu & Yuting Liu, 2023. "Influence of Utilitarian and Hedonic Attributes on Willingness to Pay Green Product Premiums and Neural Mechanisms in China: An ERP Study," Sustainability, MDPI, vol. 15(3), pages 1-16, January.
    19. Kaplan, Sigal & Bekhor, Shlomo & Shiftan, Yoram, 2011. "Eliciting and estimating reservation price: A semi-compensatory approach," Journal of Business Research, Elsevier, vol. 64(1), pages 45-50, January.
    20. Keith S. Coulter, 2013. "Commentary on: “an appraisal of behavioral price research (Part I)”," AMS Review, Springer;Academy of Marketing Science, vol. 3(3), pages 135-140, September.
    21. Ofir, Chezy & Raghubir, Priya & Brosh, Gili & Monroe, Kent B. & Heiman, Amir, 2008. "Memory-Based Store Price Judgments: The Role of Knowledge and Shopping Experience," Journal of Retailing, Elsevier, vol. 84(4), pages 414-423.

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