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The Price Does Not Include Additional Taxes, Fees, and Surcharges: A Review of Research on Partitioned PricingVicki MorwitzNew York University (NYU) - Department of Marketing Eric GreenleafNew York University (NYU) - Department of Marketing Edith ShalevNew York University (NYU) Eric J. JohnsonColumbia Business School - Marketing February 26, 2009 Abstract: An important pricing decision that many firms face is whether to use a partitioned price, which divides a product's price into two or more parts, or to charge one all-inclusive price. This paper examines trends in partitioned pricing in the marketplace and public policy arenas, and then proposes and uses a framework to organize and review extant academic research on partitioned pricing. It also proposes psychological explanations for why partitioned pricing affects consumers. We discuss the implications of academic research for practitioners and public policy makers when they create or regulate partitioned pricing strategies, and identify unanswered questions in partitioned pricing as a proposed agenda for continuing research.
Number of Pages in PDF File: 54 Keywords: partitioned pricing, fees, surcharges, taxes, shipping and handling JEL Classification: C91, C93, D18, D40, D44, D60, D83, E21, H20, K41, M31, M37 working papers seriesDate posted: February 26, 2009 ; Last revised: July 26, 2011Suggested CitationContact Information
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