The Effects of Price Discount and Product Complementarity on Consumer Evaluations of Bundle Components

Published in: Journal of Marketing Theory and Practice, v. 15, iss. 1, Winter 2007, p. 1-12

Posted on RAND.org on January 01, 2007

by Shibin Sheng, Andrew M. Parker, Kent Nakamoto

Read More

Access further information on this document at www.metapress.com

This article was published outside of RAND. The full text of the article can be found at the link above.

Existing research in bundling has primarily focused on consumer evaluations of a bundle as a whole. Drawing upon reference price theory and mental accounting theory, this paper investigates the effects of price discounts on consumer evaluations of the discounted product in a bundle. It examines how these effects interplay with complementarity of bundle components. The results of three experimental studies indicate that bundle price discounts hurt consumer evaluations of the discounted bundle component, and complementarity of bundle components attenuates these negative effects by altering a consumer's selection of mental accounts in the evaluation process.

This report is part of the RAND Corporation External publication series. Many RAND studies are published in peer-reviewed scholarly journals, as chapters in commercial books, or as documents published by other organizations.

Our mission to help improve policy and decisionmaking through research and analysis is enabled through our core values of quality and objectivity and our unwavering commitment to the highest level of integrity and ethical behavior. To help ensure our research and analysis are rigorous, objective, and nonpartisan, we subject our research publications to a robust and exacting quality-assurance process; avoid both the appearance and reality of financial and other conflicts of interest through staff training, project screening, and a policy of mandatory disclosure; and pursue transparency in our research engagements through our commitment to the open publication of our research findings and recommendations, disclosure of the source of funding of published research, and policies to ensure intellectual independence. For more information, visit www.rand.org/about/principles.

The RAND Corporation is a nonprofit institution that helps improve policy and decisionmaking through research and analysis. RAND's publications do not necessarily reflect the opinions of its research clients and sponsors.