The role of internal reference prices in consumers' willingness to pay judgments: Thaler's Beer Pricing Task revisited

Ranyard, Rob, Charlton, John P. and Williamson, Janis (2001) The role of internal reference prices in consumers' willingness to pay judgments: Thaler's Beer Pricing Task revisited. Acta Psychologica, 106 (3). pp. 265-283. ISSN 0001-6918

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Alternative reference prices, either displayed in the environment (external) or recalled from memory (internal) are known to influence consumer judgments and decisions. In one line of previous research, internal reference prices have been defined in terms of general price expectations. However, Thaler (Marketing Science 4 (1985) 199; Journal of Behavioral Decision Making 12 (1999) 183) defined them as fair prices expected from specific types of seller. Using a Beer Pricing Task, he found that seller context had a substantial effect on willingness to pay, and concluded that this was due to specific internal reference prices evoked by specific contexts. In a think aloud study using the same task (N=48), we found only a marginal effect of seller context. In a second study using the Beer Pricing Task and seven analogous ones (N=144), general internal reference prices were estimated by asking people what they normally paid for various commodities. Both general internal reference prices and seller context influenced willingness to pay, although the effect of the latter was again rather small. We conclude that general internal reference prices have a greater impact in these scenarios than specific ones, because of the lower cognitive load involved in their storage and retrieval.

Item Type: Article
Additional Information: Full text of this article not available on this repository. The definitive version of this article has been published in Acta Psychologica, © 2001 Elsevier B.V. All rights reserved.
Uncontrolled Keywords: Evaluation, Decision making, Consumer psychology
Subjects: B Philosophy. Psychology. Religion > BF Psychology
Divisions: School of Education and Psychology > Psychology
Depositing User: Scott Wilson
Date Deposited: 26 Nov 2013 12:52
Last Modified: 07 Jan 2014 10:04
Identification Number: 10.1016/S0001-6918(00)00053-6

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