The Effect of Assortment Pricing on Choice and Satisfaction: The Moderating Role of Consumer Characteristics

Abstract

Although consumer research has extensively examined the effect of product assortment on consumption choices, relatively little has been done on assortment pricing. To bridge that gap, we demonstrate that consumers react differently to assortments using parity versus differentiation pricing. Study 1, a field experiment, shows that the impact of assortment pricing on choice satisfaction is contingent on the level of uncertainty preference. For individuals with a low level of preference uncertainty, their choice satisfaction was significantly higher when all the menu items were priced at parity. Conversely, choice satisfaction was higher with varied pricing among people with high levels of preference uncertainty. In Study 2, we examine the moderating role of health consciousness on consumer reactions to parity versus differentiation pricing. The findings of Study 2 indicate that health consciousness influences consumer satisfaction with assortment pricing in a context of restaurant menus. Furthermore, findings from a moderated mediation analysis show that choice confidence is the psychological mechanism that underlies these effects. Taken together, these findings add to the relatively scant literature on assortment pricing.