Price Presentation Effects in Purchases Involving Trade-Ins

Abstract

When a new purchase involves trading in an old item, the prices of component transactions may be presented in different ways. The authors report three studies that examine how different price presentations influence evaluations and choice in an otherwise equivalent overall exchange. Although consumers play both buyer and seller roles in purchases involving trade-ins, the authors find that consumers' evaluation of the overall exchange typically places more weight on the price of the new purchase than the trade-in. However, they also show that the weights can be shifted systematically by (1) directly manipulating the importance of the trade-in and (2) indirectly priming a seller (vs. buyer) mind-set. In these instances, consumers place more weight on the trade-in price than the price of the new purchase.