You’re ordering dessert and know exactly what you want: the lavender crème brulee that was reviewed in your favorite food column.

Even if it’s the most expensive item on the dessert menu, you’ll probably order it. But what about those times when you don’t come armed with advance recommendations?

dessert tray choices

Assuming all are equal

A study in the Journal of Consumer Research found that when a person is unsure what to choose, pricing all items the same — known as “parity pricing” — can help ease the decision-making process. In other words, parity pricing may increase the likelihood that the diner will order dessert at all.

“Most prior research has examined the impact of assortment on choice irrespective of price or by explicitly assuming parity pricing,” writes Alexander Chernev (Northwestern University). “In contrast, this research documents that price differentiation can have a significant impact on choice and links this impact to preference uncertainty and the consistency between individuals’ consumption and resource-allocation preferences.”

>> Feeling powerful helps people save more money

Chernev compares parity pricing with differential pricing (pricing all items differently based on factors such as the cost of ingredients). He finds that differential pricing can both help and hinder the decision-making process since it makes cost a crucial factor, and introduces the idea of splurging or saving.

If items in the desired price range include an item with other appealing qualities, the decision is made easier by the price difference. However, if the items in the desired price range are less desirable in some way than more expensive items, the buyer becomes conflicted about getting anything at all.

“Thus, when the consumer has readily formed consumption preferences, differential pricing will ‘help’ choice when the most preferred option is also the least expensive and will ‘hurt’ choice when the most preferred option is the most expensive,” explains Chernev.

See books created by our team in the Myria shop!

(Article continues below ad)

About The Author

The Myria Editors

Myria, originally launched in 1998, strives to deliver more conversation, and less gossip. More intelligence, less eye-rolling. More acceptance, less judgment. And throughout the site: more needle, less haystack. Through life's ups, downs, and everything in between, we want to encourage you, support you, and help guide you. The team behind Myria understands that status updates and selfies never tell the whole story, and that we all have stuff to deal with, and that's nothing you need to hide here. Beyond "been there, done that" - every day, we're still there and still doing it. That's how we know: You've got this.

About: Alexander Chernev. "Differentiation and Parity in Assortment Pricing" Journal of Consumer Research. September 2006.

Photo credit(s): Photo of dessert tray choices thanks to Neeta Lind

Original publication date: July 17, 2006

Filed under: Psychological research, Shopping

Click for more on these topics: , , , , ,

Leave a comment

This site uses Akismet to reduce spam. Learn how your comment data is processed.

Pin It on Pinterest

Share This
Read previous post:
Drug interactions: What you should know

There are more opportunities today than ever before to learn about your health and to take better care of yourself....