How social comparison influences reference price formation in a service context

Giampaolo Viglia; Graziano  Abrate

doi:10.1016/j.joep.2014.09.003

How social comparison influences reference price formation in a service context

Giampaolo Viglia, Graziano Abrate

University of Eastern Piedmont

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Abstract

What is the influence on reference price when the source of price information is anonymous versus social? This article investigates the formation of reference prices given an observed sequence of past prices in a service context. An experimental study suggests that, considering the same price information, if the source is social (i.e., the prices paid by colleagues), then consumers want to pay less. More specifically, social comparison changes the way individuals weigh information, attributing more importance to the lowest historical prices and to the range in price variations.

Original language	English
Pages (from-to)	168-180
Number of pages	13
Journal	Journal of Economic Psychology
Volume	45
Early online date	2 Oct 2014
DOIs	https://doi.org/10.1016/j.joep.2014.09.003
Publication status	Published - Dec 2014

Keywords

Reference price
Social comparison
Dynamic pricing
Prelec weighting function

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10.1016/j.joep.2014.09.003

JEP 2_REVAccepted author manuscript (Post-print), 900 KBLicence: CC BY-NC-ND

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KW - Dynamic pricing

KW - Prelec weighting function

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How social comparison influences reference price formation in a service context

Abstract

Keywords

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