To Buy or Not to Buy? Shrouding and Partitioning of Prices in an Online Shopping Field Experiment
54 Pages Posted: 21 Feb 2019
Date Written: 2019
We examine whether shrouding surcharges or partitioning prices raises demand in online shopping where consumers have very low costs of cancelling an initiated purchase process. In a field experiment with more than 34,000 consumers, we find that consumers in the online shop of a large German cinema initiate a purchase process more often when surcharges are shrouded or indicated separately, but they also drop out more often when the overall price becomes known at the check-out. In sum, the demand distribution is independent of the price presentation. This result qualifies previous findings on the effectiveness of such pricing practices and can be rationalized through low cancellation costs.
Keywords: salience, inattention, shrouding, price partitioning, field experiment
JEL Classification: D810, C930
Suggested Citation: Suggested Citation