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We discuss possible explanations for these effects of uninformative price cues on revealed preferences.
The findings provide guidance for designing appropriate product and price cues to induce Internet consumer responses that favor online retailers.
Using demand-revealing experimental market institutions, we separate the shaping effects of price cues from the effects of market discipline.
Our experimental design uses 18 screens showing options made from different combinations of brand, origin and price cues.
This study suggests there is a delicate balance point where price cues and popularity cues can achieve consistency and synergy and lead to better page value perceptions for the first page.
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And, since a weaker US currency is generally good for commodity prices, cue a rise in the share prices of miners and oil producers.
Based on price signaling literature and cue consistency theory, this study investigates how price and product popularity cues could be carefully designed for the first page to achieve better sale performance.
For example, perceived savings have been used as significant responses to comparison cues of a price promotion (i.e., the difference between an external reference price and the actual price; Berkowitz and Walton 1980), price promotion messages (e.g., percentage terms vs. dollar terms; Chen et al. 1998), and tensile price claims (e.g., save up to 50%; Biswas and Burton 1993; Lee and Stoel 2016).
"We are disappointed to see NBC leave iTunes because we would not agree to their dramatic price increase," said Eddy Cue, Apple's vice president of iTunes.
These analyses show that Chinese consumers tend to use price as a quality cue and they appear to prefer a higher priced item, assuming it has a better quality.
This model supports that price promotion (an extrinsic cue of product attribute) may influence consumers' perception of product quality (perceptions of functional and psychosocial consequences) and consumers' perception of product quality is linked to consumers' perception of value.
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Justyna Jupowicz-Kozak
CEO of Professional Science Editing for Scientists @ prosciediting.com