When does the price presentation order impact choices? Dispositional and situational moderators for the price order effect

Abstract

Consumers are often presented with multiple prices—either for the same item (e.g. auctions or negotiations) or for a suite of options. Existing research has shown that the order in which multiple prices are presented can influence consumer choices. Specifically, ascending (vs. descending) price order can result in a stronger tendency to choose lower prices—an effect termed as the price order effect. While this effect has been studied extensively across a variety of domains, its boundary conditions are relatively unknown. This research fills this important gap by identifying specific dispositional (regulatory focus and sense of power) and situational (self vs. other focus, abstract vs. concrete mindset, and gain vs. loss focus) moderators of the price order effect. Specifically, across a series of four studies, we show that the price order effect is stronger for (a) prevention (vs. promotion) focused consumers, (b) those with low (vs. high) sense of power, (c) under self (vs. other) focus, (d) under concrete (vs. abstract) mindset, and (e) under loss (vs. gain) focus. This research also provides additional evidence for loss aversion as the proposed mechanism for price order effect. We discuss the theoretical contributions and managerial implications of this research, and identify potential future research directions.