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Mode of payment and formation of reference prices

Mode of payment and formation of reference prices States that reference price has emerged as a central feature in consumer decisions. The goal of this study was to explore the contribution of mode of payment to the formulation of personal reference prices (what one believes to be a fair price for a product) and reservation prices (the highest price one is willing to pay for a product). Reference prices for the products were significantly influenced by mode of payment (check, cash, credit card). Those in the credit card condition formulated significantly higher reference and reservation prices than when other modes of payment were considered. That credit cards can raise reference prices leads to a better understanding of why consumers spend more with credit cards. http://www.deepdyve.com/assets/images/DeepDyve-Logo-lg.png Pricing Strategy and Practice Emerald Publishing

Mode of payment and formation of reference prices

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Publisher
Emerald Publishing
Copyright
Copyright © 1997 MCB UP Ltd. All rights reserved.
ISSN
0968-4905
DOI
10.1108/09684909710184635
Publisher site
See Article on Publisher Site

Abstract

States that reference price has emerged as a central feature in consumer decisions. The goal of this study was to explore the contribution of mode of payment to the formulation of personal reference prices (what one believes to be a fair price for a product) and reservation prices (the highest price one is willing to pay for a product). Reference prices for the products were significantly influenced by mode of payment (check, cash, credit card). Those in the credit card condition formulated significantly higher reference and reservation prices than when other modes of payment were considered. That credit cards can raise reference prices leads to a better understanding of why consumers spend more with credit cards.

Journal

Pricing Strategy and Practice – Emerald Publishing

Published: Dec 1, 1997

Keywords: Consumer behaviour; Credit cards; Pricing

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