Turning unplanned overpayment into a status signal: how mentioning the price paid repairs satisfaction

Aaron M. Garvey, Simon J. Blanchard, Karen Page Winterich

Research output: Contribution to journalArticlepeer-review

1 Scopus citations

Abstract

We investigate how mentioning the price paid to others (which we refer to as price-dropping) can be used to assuage the negative experience that occurs when consumers realize they unintentionally overpaid for a product. Specifically, we show that by engaging in price-dropping, consumers re-appropriate the overpayment into a conspicuous consumption signal that improves their satisfaction. Two studies demonstrate that the effect of price-dropping is mitigated when consumers who overpaid have low sensitivity to status cues, and also when the audience of the price-drop is unreceptive to status cues. We discuss how price-dropping has implications for retailer pricing policies and customer experience, along with avenues for future research.

Original languageEnglish (US)
Pages (from-to)71-83
Number of pages13
JournalMarketing Letters
Volume28
Issue number1
DOIs
StatePublished - Mar 1 2017

All Science Journal Classification (ASJC) codes

  • Business and International Management
  • Economics and Econometrics
  • Marketing

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