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http://ssrn.com/abstract=1350004
 
 

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The Price Does Not Include Additional Taxes, Fees, and Surcharges: A Review of Research on Partitioned Pricing


Eric Greenleaf


New York University (NYU) - Department of Marketing

Eric J. Johnson


Columbia Business School - Marketing

Vicki Morwitz


New York University (NYU) - Department of Marketing

Edith Shalev


New York University (NYU)

July 21, 2015


Abstract:     
In the past two decades, pricing research has paid increasing attention to instances where a product's price is divided into a base price and one or more mandatory surcharges, a practice termed partitioned pricing. Recently, partitioned pricing strategies in the marketplace have become more pervasive and complex, raising concerns that consumers do not always fully attend to or process all price information, and underestimate total prices, which in turn influences their purchasing behavior. Thus, understanding how partitioned prices affect consumers is of increasing interest to consumer researchers, public policy makers, and marketing managers. This paper reviews and organizes the academic literature on partitioned pricing and proposes an agenda for future research. We focus on the psychological processes underlying partitioned pricing, to help these three constituencies understand how partitioned pricing works, the mechanisms by which it exerts its impact, and the appropriate areas where the practice may need regulation to protect consumers.

Number of Pages in PDF File: 55

Keywords: partitioned pricing, fees, surcharges, taxes, shipping and handling

JEL Classification: C91, C93, D18, D40, D44, D60, D83, E21, H20, K41, M31, M37


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Date posted: February 26, 2009 ; Last revised: September 1, 2015

Suggested Citation

Greenleaf, Eric and Johnson, Eric J. and Morwitz, Vicki and Shalev, Edith, The Price Does Not Include Additional Taxes, Fees, and Surcharges: A Review of Research on Partitioned Pricing (July 21, 2015). Available at SSRN: http://ssrn.com/abstract=1350004 or http://dx.doi.org/10.2139/ssrn.1350004

Contact Information

Eric Greenleaf
New York University (NYU) - Department of Marketing ( email )
Henry Kaufman Ctr
44 W 4 St.
New York, NY
United States
Eric J. Johnson
Columbia Business School - Marketing ( email )
New York, NY 10027
United States

Vicki Morwitz (Contact Author)
New York University (NYU) - Department of Marketing ( email )
Henry Kaufman Ctr
44 W 4 St.
New York, NY
United States
Edith Shalev
New York University (NYU) ( email )
Bobst Library, E-resource Acquisitions
20 Cooper Square 3rd Floor
New York, NY 10003-711
United States
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