Abstract
According to the price-expectancy model of consumer choice, consumers evaluate products by comparing the actual price with a reference or expected price determined from (a) product's quality and (b) the price-quality correlation of the product category. Choices between hypothetical products of beer are used to test the model against a model without a reference price. Consistent with the price-expectancy model, product preferences varied with the subjective correlation between price and quality: the relative preference for higher priced/higher quality products over lower priced/lower quality products increased as the subjective correlation increased. For some pairs, the correlation between price and quality created a preference reversal across contexts: the higher priced/higher quality product was chosen over the lower priced/lower quality product in the higher correlational context, but the lower priced/lower quality product was chosen over the higher priced/higher quality product in the lower correlational context. An additional study provided evidence that the price - quality correlation affects reference price, rather than reference quality, formation.
| Original language | English (US) |
|---|---|
| Pages (from-to) | 258-273 |
| Number of pages | 16 |
| Journal | Organizational Behavior and Human Decision Processes |
| Volume | 75 |
| Issue number | 3 |
| DOIs | |
| State | Published - Sep 1 1998 |
| Externally published | Yes |
ASJC Scopus subject areas
- Applied Psychology
- Organizational Behavior and Human Resource Management