The Influence of Price Presentation Order on Consumer Choice

Abstract

Existing theory and prior research suggest that consumers perceive purchase prices more/less favorably when they are preceded by higher/lower prices. However, to date, researchers have found these effects in contexts in which the product, and thus perceived quality, is held constant. Given that consumers commonly believe price and quality are positively correlated and that price quality perceptions have been shown to influence price evaluations and willingness to pay, the generalizability of existing research to commonly encountered contexts is questionable. In this research, the authors examine the influence of price order on consumer choice across differing brands in contexts in which consumer quality perceptions are free to covary with price and they are manipulated to be correlated or uncorrelated with price. Using reference dependence theory as a framework, they find that when differing brand options are presented in descending price order, consumers tend to choose higher-price options; when they are presented in ascending price order, consumers tend to choose lower-priced options (the price order effect). In addition, the authors show that consumers' price quality perceptions are a necessary condition for this effect.