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Author:Dawar, N.
Sarvary, M.
Title:The signaling impact of low introductory price on perceived quality and trial
Journal:Marketing Letters
1997 : JUL, VOL. 8:3, p. 251-259
Index terms:SIGNALING
ECONOMIC THEORY
PRICES
QUALITY
Language:eng
Abstract:The relationships of intentions to purchase with price appears to vary depending on market condition. The specific effects are consistent with predictions from Nelson-Schmalensee game suggesting that in the separating condition a negative relationship between price and intentions to purchase should hold; in the pooling condition a positive relationship; and no relationship in the uncertain condition. However consumers' judgements of quality appear to be positively related to price regardless of market condition. This suggests that behavioral outcomes of the market conditions specified by the signaling game may be more complex than previous research has shown. An implication of the results is that behavior may be inconsistent with judgements of quality under certain market conditions.
SCIMA record nr: 164281
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