Title

The Influence of Pricing Strategies on Willingness to Pay for Accommodations: Anchoring, Framing, and Metric Compatibility

Document Type

Article

Publication Date

8-22-2018

Publication Title

Journal of Travel Research

First page number:

1

Last page number:

13

Abstract

Travel providers advertise low prices to attract customers, which can decrease willingness to pay through anchoring effects. Customers often approach purchases with a budget goal, which can influence price interpretation due to framing effects. Accommodation prices are typically displayed per night, whereas consumers may have a total trip budget in mind, leading to metric incompatibility. This research uses experimental methods to test the effects of price anchors, framing, and metric compatibility on willingness to pay for a Spring Break vacation. A high anchor increases willingness to pay compared to a low anchor, and consumers will pay more when exposed to an average price versus a range. Anchoring effects are reduced when the budget goal is incompatible with a high anchor but not a low anchor. The findings can be attributed to dual processing systems and asymmetry effects. The results yield practical guidelines for effective pricing strategies.

Keywords

Pricing; Anchoring; Framing; Heuristics; Dual processing; Willingness-to-pay

Disciplines

Tourism and Travel

Language

English

UNLV article access

Search your library

Share

COinS