The Role of Reference Price in Gift Registry Fulfillment: Empirical and Experimental Evidence

40 Pages Posted: 7 Aug 2010

See all articles by Ye Hu

Ye Hu

University of Houston - Bauer College of Business

Xin Wang

Brandeis University

Yun Kyung Oh

affiliation not provided to SSRN

Shenghui Zhao

Independent

William Robinson

affiliation not provided to SSRN

Date Written: November 13, 2008

Abstract

The authors examine the role of reference prices in a unique form of gift giving behavior - gift registries. A Hierarchical Bayesian analysis of fulfillment data from 555 online wedding registries and results from a laboratory experiment reveal that gift fulfillment probability follows a bimodal distribution around the average price of a gift registry. This is consistent with the hypothesis that gift purchases in the context of gift registries are driven by the average price of the registry, which serves as the reference price, and two competing motivations among gift givers: a desire for social benefits (e.g., to enhance relationship) and a desire for monetary benefits (e.g., to save money). The former motivation favors gift items with higher than average prices whereas the latter favors those with lower than average prices. This finding is robust after controlling for gift budget and relationship with the recipient. Our analysis also indicates that higher reference prices in the form of average price of the registry increase total gift spending from a registry, but only when gift givers are casual acquaintances to the recipient.

Keywords: registry gift giving, reference price, retailing

Suggested Citation

Hu, Ye and Wang, Xin and Oh, Yun Kyung and Zhao, Shenghui and Robinson, William, The Role of Reference Price in Gift Registry Fulfillment: Empirical and Experimental Evidence (November 13, 2008). Available at SSRN: https://ssrn.com/abstract=1300979 or http://dx.doi.org/10.2139/ssrn.1300979

Ye Hu (Contact Author)

University of Houston - Bauer College of Business ( email )

Houston, TX 77204-6021
United States

Xin Wang

Brandeis University ( email )

Mailstop 32
Waltham, MA 02454-9110
United States

Yun Kyung Oh

affiliation not provided to SSRN ( email )

Shenghui Zhao

Independent ( email )

William Robinson

affiliation not provided to SSRN

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