Interesting Results
Incidental Prices Affect Willingness to Pay
Marketers have long understood that prevailing prices within a product category affect the amount that customers are willing to pay for a particular product within the same category, but new research shows that similar effects can occur across unrelated product categories. Two experiments and analysis of data pertaining to 3378 automobiles sold through auctions showed that exposure to prices for one product influenced the amount that purchasers were willing to pay for a second, unrelated product. It’s important to note, however, that these effects were observed in product categories in which market prices are not well known and consistent, and that the authors of the study speculated that exposure to incidental prices would be less likely to influence willingness to pay for products and services with less ambiguous market prices.