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| Author: | Garbarino, E. Lee, O.F. |
| Title: | Dynamic pricing in Internet retail: Effects on consumer trust |
| Journal: | Psychology & Marketing
2003 : JUN, VOL. 20:6, p. 495-513 |
| Index terms: | Electronic commerce Consumer behaviour Consumer attitudes Pricing Policy Retailing Internet Models |
| Freeterms: | e-commerce |
| Language: | eng |
| Abstract: | Economic theory argues that dynamic pricing (for example individual-level price discrimination) is inherently good for the profitability of the firm. That is because it allows the firm to capture a larger share of the consumer surplus, but evidence from recent retail experiments with Internet-based dynamic pricing suggests that consumers react strongly against this practice. This experiment examines how the experience of a dynamic pricing event and the direction of the pricing discrimination affects both the mean levels of trust and the weight given to separate trust dimensions, that is benevolence and competence, in the formation of overall trust. Because demand-based pricing is generally considered unfair, it is expected that trust levels will be lower and more weight will be given to benevolence trust. Results show that mean benevolence trust is significantly lower, and the weight given to benevolence trust in the formation of overall trust substantially increases. The direction-of-price-discrimination effects are generally unsupported. |
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