Regulating Drip Pricing

2019 ◽  
Author(s):  
David Adam Friedman
Keyword(s):  
Drip Pricing

Economics at the FTC: Drug and PBM Mergers and Drip Pricing

2012 ◽  
Vol 41 (4) ◽  
pp. 303-319 ◽  
Author(s):  
Howard A. Shelanski ◽  
Joseph Farrell ◽  
Daniel Hanner ◽  
Christopher J. Metcalf ◽  
Mary W. Sullivan ◽  
...  
Keyword(s):  
Drip Pricing

Feeling nickeled and dimed – consequences of drip pricing

2015 ◽  
Vol 25 (5) ◽  
pp. 621-635 ◽  
Author(s):  
Thomas Robbert
Keyword(s):  
Structural Equation ◽  
Perceived Value ◽  
Purchase Intentions ◽  
Equation Modeling ◽  
Content Type ◽  
Price Consciousness ◽  
Partitioned Pricing ◽  
Telecommunication Companies ◽  
Price Partitioning ◽  
Drip Pricing

Purpose – In drip pricing, companies advertise low prices for products or services and then tack on additional surcharges later in the purchase process. This tactic has not only become popular for airlines but also for other online services, such as retailers and telecommunication companies. Despite the widespread use of drip pricing in the marketplace, little is known about its effects on consumer behavior. The purpose of this paper is to compare the effects of drip pricing with those of price partitioning. Specifically, it elaborates on perceived value, perceived deception, purchase intentions, and the moderating effect of price consciousness. Design/methodology/approach – The paper develops a conceptual framework and tests four hypotheses with an experimental study on a purchase decision for a continental flight booked through an online travel agent. The experiment is based on a between-subjects design with two groups (n=130). The data are analyzed with multivariate statistics and structural equation modeling. Findings – The findings reveal that drip pricing for service offerings leads to inferior results compared with partitioned pricing in terms of perceived value, perceived deception, and, ultimately, purchase intentions. The findings also indicate that the effects differ depending on the customer’s price consciousness. Originality/value – The study draws from previous studies on partitioned pricing and replicates their findings. However, it is one of the first studies to elaborate on moderators and mediators of the consequences of drip pricing in a service context.

scholarly journals Drip pricing and its regulation: Experimental evidence

2020 ◽  
Vol 176 ◽  
pp. 353-370
Author(s):  
Alexander Rasch ◽  
Miriam Thöne ◽  
Tobias Wenzel
Keyword(s):  
Experimental Evidence ◽  
Drip Pricing

Consumer Reactions to Drip Pricing

2020 ◽  
Vol 39 (1) ◽  
pp. 188-210
Author(s):  
Shelle Santana ◽  
Steven K. Dallas ◽  
Vicki G. Morwitz
Keyword(s):  
Consumer Reactions ◽  
Drip Pricing

The flip side of drip pricing

2014 ◽  
Vol 23 (6) ◽  
pp. 413-419 ◽  
Author(s):  
Thomas Robbert ◽  
Stefan Roth
Keyword(s):  
Design Methodology ◽  
Online Survey ◽  
Empirical Studies ◽  
Purchase Intentions ◽  
Content Type ◽  
Fairness Perceptions ◽  
Price Partitioning ◽  
Pricing Research ◽  
Drip Pricing ◽  
Total Price

Purpose – The purpose of this paper is to elaborate on the differences between price partitioning and drip pricing with regard to their influence on price recall, purchase intentions and fairness perceptions. In many industries, sellers advertise low prices and reveal other surcharges sequentially as the customer goes through the buying process. To date, little is known about how these sequential, or drip-pricing, techniques influence consumer behavior. Design/methodology/approach – The study is based on an experimental between-subjects design (N = 95) with two groups. The data collection was conducted with a mixed scenario/stimuli-based online survey for a virtual travel agent. Findings – The findings reveal that underestimation of the total price of an offering is significantly weaker when prices are presented sequentially rather than partitioned. In addition to reduced purchase intentions, drip pricing may negatively affect fairness perceptions when consumers feel deceived by the seller. Originality/value – The study replicates findings of previous research on price partitioning but is one of the first empirical studies to examine the influence of sequence in price presentations. With this focus, the study opens up new avenues for pricing research.

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