The Impact of Historical Price Information on Purchase Deferral

• Published in: Journal of marketing research Vol. 59; no. 3; pp. 623 - 640
• Main Authors: Gunadi, Manissa P., Evangelidis, Ioannis
• Format: Journal Article
• Language: English
• Published: Los Angeles, CA SAGE Publications 01.06.2022; SAGE PUBLICATIONS, INC
• Subjects: Buying; Consumer behavior; Prices; historical prices; purchase deferral; price; frequency of price changes; purchase decisions
• ISSN: 0022-2437; 1547-7193
• DOI: 10.1177/00222437211060359

In this article, the authors examine how historical price information influences consumers’ decision to defer a purchase. They focus on two aspects of historical price information: the direction and the frequency of past price changes. The authors advance a theoretical framework postulating that the interaction between these two factors shapes consumers’ decisions to buy now versus later. Controlling for the total magnitude of price changes, the authors propose that consumers are more likely to defer purchase when the price of the product has previously increased compared with when the price has decreased. Importantly, the authors hypothesize that this effect is more pronounced when consumers observe a single large change in price (e.g., a decrease of $100 vs. an increase of $100) compared with when they observe multiple smaller changes that establish a trend (e.g., four decreases of $25 vs. four increases of $25). The authors argue that these effects are driven by differences in consumers’ expectations about future prices. They test their predictions, as well as two moderators of the proposed effects—the monotonicity and the timing of price changes—in six well-powered preregistered experimental studies (N = 5,713) using both hypothetical and actual purchases.