Reexamining Latitude of Price Acceptability and Price Thresholds: Predicting Basic Consumer Reaction to Price

Behavioral pricing research has shown consumers to have lower and upper price thresholds, represented by an inverted U-shaped price acceptability function. We propose another basic reaction to price, namely, "lower price is better," represented by a decreasing acceptability function without a lower price threshold. A set of variables is hypothesized to predict consumer reaction to price. Price consciousness, price-quality relation, and product involvement are shown to influence the shape of the price acceptability function. A procedure and model to scale price acceptability and obtain acceptability functions are introduced and applied. The cumulative results suggest reliable acceptability scales along with evidence for convergent and construct validity.