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- Title
Consumer preference for pay-per-use service tariffs: the roles of mental accounting.
- Authors
Yun, Sejeong; Suk, Kwanho
- Abstract
When consumers purchase service plans, they often fail to choose the lowest cost alternative because of their general tendency to avoid pay-per-use pricing. The present research examines the role of psychological process in consumer' preference for price plans, focusing on the reasons for lower preference for pay-per-use plans. In addition, this research proposes a novel method to increase the preference for pay-per-use pricing by simply reframing it as a price plan with an initial allowance and gains and losses from the allowance. The results of seven studies demonstrate that the reframed pay-per-use plan is preferred to the regular pay-per-use plan, although the actual costs are the same. The increased preference for the reframed pay-per-use is caused by the change in the salient reference point that influences the perceived gain and loss of the price plan.
- Subjects
CONSUMER preferences; PAYMENT; TARIFF; PRICING; FLAT rates; MENTAL accounting (Economic theory); REFRAMING (Business)
- Publication
Journal of the Academy of Marketing Science, 2022, Vol 50, Issue 5, p1111
- ISSN
0092-0703
- Publication type
Article
- DOI
10.1007/s11747-022-00853-y