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Research Note—Attention Arousal Through Price Partitioning

London Business School, Regent's Park, London NW1 4SA, United Kingdom
ESMT European School of Management and Technology, Schlossplatz 1, Berlin 10178, Germany
mbertini{at}london.edu
wathieu{at}esmt.org

Existing evidence suggests that preferences are affected by whether a price is presented as one all-inclusive expense or partitioned into a set of mandatory charges. To explain this phenomenon, we introduce a new mechanism whereby price partitioning affects a consumer's perception of the secondary (i.e., nonfocal) benefits derived from a transaction. Four experiments support the hypothesis that a partitioned price increases the amount of attention paid to secondary attributes tagged with distinct price components. Characteristics of the offered secondary attributes such as their perceived value, relative importance, and evaluability can therefore determine whether price partitioning stimulates or hinders demand. Beyond its descriptive and prescriptive implications, this theory contributes to the emerging notion that pricing can transform, as well as capture, the utility of an offer.

Key Words: consumer behavior; pricing; price partitioning; attention; information processing; framing effects; multi-attribute utility
History: Received: September 23, 2005;