Internet differential pricing: Effects on consumer price perception,emotions, and behavioral responses

Differential pricing is a strategy that retailers have used effectively in capturing sales and profits. The advent of the Internet is a new domain where this strategy can be applied conveniently and economically. This study examines the effects of various Internet differential pricing tactics (buyer identification, purchase quantity, purchase timing, and multi-channels) on consumers’ cognitive (i.e., perceptions of price fairness), emotional, and behavioral responses. A survey on 367 marketing students in Taiwan was carried out. Empirical findings show that perceived fairness is significantly related to emotions, and while emotions similarly affect behavioral responses, it also mediates the relationship between perceptions of price fairness and behavioral responses. Practical implications and future studies for internet pricing strategies are further discussed.