Reference Price and Its Asymmetric Effects on Price Evaluations: The Moderating Role of Gender

Abstract

Empirical research shows that customers form price evaluations by comparing the actual price with a reference price. The relative use of an internal reference price (IRP) versus an external reference price (ERP) is an important issue in the lodging industry due to the popularity of price-comparison–based advertising. Although prior literature shows that demographic factors influence the relative use of IRP and ERP, the impact of gender on the relationship between reference prices and price evaluations has received scant attention in both hospitality and marketing contexts. Drawing on the agency-communal theory, the current research examines the effect of gender on the use of IRP and ERP in price evaluations. The findings indicate that males are more susceptible to IRP than to ERP, whereas females are only influenced by ERP. Relevant managerial implications are drawn in terms of pricing and promotional strategies.