Online shopping platforms allow people to see changes in a product’s price over time — offering opportunities for buyers and sellers alike.
January 20, 2023
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Whether on retailers’ own platforms or through third-party price tracking services, today’s consumers often have access to detailed information regarding changes in a product’s price over time. But how does this visibility influence their purchasing decisions? Through a series of studies, the authors found that buyers are more likely to buy now if they see a single large price decrease or a series of smaller price increases, because they’ll assume that the price will go up if they wait. Conversely, they’re more likely to hold off on buying if they see a single large price increase or a series of smaller decreases, because they’ll assume the price will fall. As such, they argue that sellers should consider this effect when pricing their products, while buyers should recognize and question this natural tendency — to expect price streaks to continue and single large changes to reverse — before acting on it.
