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Date of Award
Management and Information Systems
Price fairness is an important area of consumer research and marketers ought to be cognizant of what triggers perceptions of (un)fairness, especially when they employ novel pricing tactics/tools. One such novel practice is drip pricing. The US Federal Trade Commission (FTC), the Office of Fair Trading (OFT) in the UK and the Australian Competition & Consumer Commissions (ACCC), have taken a keen interest in the drip pricing phenomenon since 2012, presumably because of its deceptive potential. However, there has been scarce research in drip pricing, especially in the behavioral domain. Also, the definition of the practice seems to be inconsistent across the literature and past research in drip pricing has reported of contrasting findings. In this dissertation, we first defined the practice of drip pricing, distinguished it from related practices and developed a typology of drip pricing. In the process, we cleared the current state of confusion surrounding the conceptualization of drip pricing. Next, through four experiments, we examined the behavioral effects of drip pricing and underscore our contribution to the pricing literature. In the first three studies, we compared the effects of drip pricing with common pricing practices (all-inclusive and standard partitioned) on perceptual outcomes such as consumer’s purchase intention, their perception of price unfairness and the extent to which they perceive this practice to be deceptive. We also tested for multiple mediation hypotheses that explain the process behind the effects of drip pricing on consumer’s perceptions using cognitive (perception of deception of the pricing practice and perceived granularity of price information) and affective factors (irritation) as mediators. Finally, in study four, we tested for boundary condition using ‘expectation of drip pricing’.
Banerjee, Somak, "The Effect Of Drip Pricing On Consumers Fairness Perceptions" (2018). Wayne State University Dissertations. 2009.