Four Essays on Behavioral Pricing

Behavioral pricing is the study of how consumers perceive and process price information, how they react to price changes, and how they use price information for their judgments and decisions. In the three main research areas of behavioral pricing, namely (1) effects of background variables,(2) processing fluency, and (3) mental accounting, emphasis is placed on psychological processes that help to better explain consumers’ pricing-related behavior. In doing so, behavioral pricing is able to address shortcomings in traditional pricing models by accounting for the consumer perspective and considering the bounded rationality of people. Using a customer-centric approach, the four essays in this dissertation examine consumer behavior considering recent developments in pricing. The first essay focuses on dynamic pricing in retailing and how different practices influence perceptions of value for money; the second essay addresses the question of optimal discount strategies in times of increasing price transparency; the third essay analyzes consumers’ behavioral reactions to payments with fantasy currencies; and, finally, the fourth essay introduces and investigates discounted gift cards as an alternative form of price discount to consider in the pricing literature. Through these analyses, this dissertation shows how versatile and powerful behavioral pricing research is in understanding pricing-related consumer behavior and offers important implications for research and practice.