The moderating effects of need for cognition and cognitive effort on responses to multi-dimensional prices

Hyeong Min Kim, Thomas Kramer

Research output: Contribution to journalArticlepeer-review

23 Scopus citations

Abstract

We investigate how need for cognition and cognitive effort associated with multi-dimensional pricing combine to influence demand. Experiment 1 shows that individuals with low (vs. high) need for cognition are less likely to purchase products that list price and relative discount separately. The direction of the effect of need for cognition on demand is found to depend on whether consumers' inaccurate arithmetic generally leads them to overestimate or underestimate final prices. Therefore, experiment 2 finds that individuals with low (vs. high) NFC are more likely to purchase products that list price and relative surcharge separately. As expected, the effect is eliminated for absolute discounts or surcharges and mediated by recalled purchase prices.

Original languageEnglish (US)
Pages (from-to)193-203
Number of pages11
JournalMarketing Letters
Volume17
Issue number3
DOIs
StatePublished - Jul 2006
Externally publishedYes

Keywords

  • Cognitive effort
  • Discounts
  • Need for cognition
  • Partitioned prices

ASJC Scopus subject areas

  • Business and International Management
  • Economics and Econometrics
  • Marketing

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