Dauenhauer, C.; Perret J.K.: Determinants of Purchasing Behavior – On the Interaction of Price Anchors and the Framing of Price Changes

Dauenhauer, C.; Perret J.K.: Determinants of Purchasing Behavior – On the Interaction of Price Anchors and the Framing of Price Changes

JEL classification: C21, D91, M31

Key words: Purchasing; Behavior; Price Anchor; Framing; Prospect Theory; Discounter

Summary:

Low involvement goods per definition do not require the customer to invest a significant amount of will-power into the purchasing decision. Thus, buying decisions in this context are primarily driven by the intuitive mind and relevant decision heuristics.

This study focuses on the anchor and the framing heuristic, their combined effect on the willingness-to-buy of low involvement goods and especially their interaction effect.

It is established that of the two heuristics considered, the framing effect is the more relevant with an impact roughly 2.5 times the size of the anchor effect. An interaction effect between the two heuristics exists even though it is only weakly significant and only marginally impacts the willingness-to-buy, reporting an effect size of one fifth of the anchor effect. Although limited in its scope the weakly significant interaction effect shows that in certain retail environments price reduction have a more pronounced effect than in others.

The study provides relevant insights from a theoretical academic perspective and offers advice to marketing practioners, in particular advertising experts.

Download the paper