Shifting the Blame

How Surcharge Pricing Influences Blame Attributions for a Service Price Increase

Florian Pallas, Lisa Elizabeth Bolton, Lara Lobschat

Research output: Contribution to journalArticle

Abstract

The proliferation of surcharges in service pricing raises theoretical and pragmatic questions regarding their impact on consumers. This research investigates how surcharges influence consumer responses to a service price increase. We propose that various kinds of surcharge information act in concert to drive blame attributions for a price increase: Internal (vs. external) surcharges increase blame attributions and minimize the influence of other drivers captured in surcharge information such as temporal stability, surcharge benefit, and more than one kind of surcharge. In comparison to all-inclusive pricing, we find that (i) surcharge pricing is detrimental to service firms when surcharges cue internal locus of causality, regardless of the temporal stability or surcharge benefit, whereas (ii) surcharge pricing is beneficial when surcharges cue external locus of causality, particularly when the surcharges are permanent and high benefit; (iii) consumers are more sensitive to increases in the magnitude of internal (vs. external) surcharges; and (iv) in the case of mixed surcharges, internal surcharges are more prominent and minimize the buffering effect of adding external surcharges. Based on our findings, we make recommendations to managers on the optimal design of surcharge pricing to mitigate negative blame reactions when communicating service price increases to consumers.

Original languageEnglish (US)
Pages (from-to)302-318
Number of pages17
JournalJournal of Service Research
Volume21
Issue number3
DOIs
StatePublished - Aug 1 2018

Fingerprint

attribution
pricing
Costs
causality
proliferation
pragmatics
Managers
driver
Pricing
Attribution
manager
firm
Causality

All Science Journal Classification (ASJC) codes

  • Information Systems
  • Sociology and Political Science
  • Organizational Behavior and Human Resource Management

Cite this

@article{b82bf4991ee14f50a861c60f7bfbec2b,
title = "Shifting the Blame: How Surcharge Pricing Influences Blame Attributions for a Service Price Increase",
abstract = "The proliferation of surcharges in service pricing raises theoretical and pragmatic questions regarding their impact on consumers. This research investigates how surcharges influence consumer responses to a service price increase. We propose that various kinds of surcharge information act in concert to drive blame attributions for a price increase: Internal (vs. external) surcharges increase blame attributions and minimize the influence of other drivers captured in surcharge information such as temporal stability, surcharge benefit, and more than one kind of surcharge. In comparison to all-inclusive pricing, we find that (i) surcharge pricing is detrimental to service firms when surcharges cue internal locus of causality, regardless of the temporal stability or surcharge benefit, whereas (ii) surcharge pricing is beneficial when surcharges cue external locus of causality, particularly when the surcharges are permanent and high benefit; (iii) consumers are more sensitive to increases in the magnitude of internal (vs. external) surcharges; and (iv) in the case of mixed surcharges, internal surcharges are more prominent and minimize the buffering effect of adding external surcharges. Based on our findings, we make recommendations to managers on the optimal design of surcharge pricing to mitigate negative blame reactions when communicating service price increases to consumers.",
author = "Florian Pallas and Bolton, {Lisa Elizabeth} and Lara Lobschat",
year = "2018",
month = "8",
day = "1",
doi = "10.1177/1094670518755314",
language = "English (US)",
volume = "21",
pages = "302--318",
journal = "Journal of Service Research",
issn = "1094-6705",
publisher = "SAGE Publications Inc.",
number = "3",

}

Shifting the Blame : How Surcharge Pricing Influences Blame Attributions for a Service Price Increase. / Pallas, Florian; Bolton, Lisa Elizabeth; Lobschat, Lara.

In: Journal of Service Research, Vol. 21, No. 3, 01.08.2018, p. 302-318.

Research output: Contribution to journalArticle

TY - JOUR

T1 - Shifting the Blame

T2 - How Surcharge Pricing Influences Blame Attributions for a Service Price Increase

AU - Pallas, Florian

AU - Bolton, Lisa Elizabeth

AU - Lobschat, Lara

PY - 2018/8/1

Y1 - 2018/8/1

N2 - The proliferation of surcharges in service pricing raises theoretical and pragmatic questions regarding their impact on consumers. This research investigates how surcharges influence consumer responses to a service price increase. We propose that various kinds of surcharge information act in concert to drive blame attributions for a price increase: Internal (vs. external) surcharges increase blame attributions and minimize the influence of other drivers captured in surcharge information such as temporal stability, surcharge benefit, and more than one kind of surcharge. In comparison to all-inclusive pricing, we find that (i) surcharge pricing is detrimental to service firms when surcharges cue internal locus of causality, regardless of the temporal stability or surcharge benefit, whereas (ii) surcharge pricing is beneficial when surcharges cue external locus of causality, particularly when the surcharges are permanent and high benefit; (iii) consumers are more sensitive to increases in the magnitude of internal (vs. external) surcharges; and (iv) in the case of mixed surcharges, internal surcharges are more prominent and minimize the buffering effect of adding external surcharges. Based on our findings, we make recommendations to managers on the optimal design of surcharge pricing to mitigate negative blame reactions when communicating service price increases to consumers.

AB - The proliferation of surcharges in service pricing raises theoretical and pragmatic questions regarding their impact on consumers. This research investigates how surcharges influence consumer responses to a service price increase. We propose that various kinds of surcharge information act in concert to drive blame attributions for a price increase: Internal (vs. external) surcharges increase blame attributions and minimize the influence of other drivers captured in surcharge information such as temporal stability, surcharge benefit, and more than one kind of surcharge. In comparison to all-inclusive pricing, we find that (i) surcharge pricing is detrimental to service firms when surcharges cue internal locus of causality, regardless of the temporal stability or surcharge benefit, whereas (ii) surcharge pricing is beneficial when surcharges cue external locus of causality, particularly when the surcharges are permanent and high benefit; (iii) consumers are more sensitive to increases in the magnitude of internal (vs. external) surcharges; and (iv) in the case of mixed surcharges, internal surcharges are more prominent and minimize the buffering effect of adding external surcharges. Based on our findings, we make recommendations to managers on the optimal design of surcharge pricing to mitigate negative blame reactions when communicating service price increases to consumers.

UR - http://www.scopus.com/inward/record.url?scp=85041403799&partnerID=8YFLogxK

UR - http://www.scopus.com/inward/citedby.url?scp=85041403799&partnerID=8YFLogxK

U2 - 10.1177/1094670518755314

DO - 10.1177/1094670518755314

M3 - Article

VL - 21

SP - 302

EP - 318

JO - Journal of Service Research

JF - Journal of Service Research

SN - 1094-6705

IS - 3

ER -