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Construal and Price Perception 1

The Moderating Effect of Construal Level on Contextual Price Judgments

Julian K. Saint Clair, Jeffrey D. Shulman and Marcus Cunha, Jr

September 2011

Author Notes

The authors contributed equally to the paper.

Julian K. Saint Clair is a doctoral student in marketing and Jeffrey D. Shulman is the Michael G. Foster Faculty Fellow assistant professor in marketing, both are at the Michael G. Foster School of Business, University of Washington. Marcus Cunha, Jr. is an associate professor in marketing at Terry College of Business, University of Georgia. Address correspondence to Julian K. Saint Clair ([email protected]), 317 Mackenzie Hall, P.O. Box 353200, Seattle, WA 98195.


Abstract

When considering a product set, consumer price judgments are often explained by range-

frequency theory, wherein target products are judged as more (less) expensive when the range or

frequency of prices in the consideration set shift downward (upward). We demonstrate that

construal level moderates such context effects. When low level construal is activated prior to

price judgments, we observe the standard contrast effect predicted by range-frequency.

Alternatively, target price judgments assimilate toward the mean price of the consideration set

when high construal level is activated. This latter finding is at odds with a large bulk of research

in price perceptions.

Keywords: Construal, Price, Context


The Moderating Effect of Construal Level on Contextual Price Judgments

Imagine a consumer who considers buying a block of high-end cheese for $28.95. On the

shelf are other cheeses that vary in price. In making the purchase decision, the consumer tries to

judge the expensiveness of this cheese. If prices of the other cheeses with which the $28.95 is

observed (i.e., the contextual prices) operate as standards of price comparison they can influence

the consumer’s judgment of the target price. This research examines how a consumer’s construal

level at the time of judgment moderates the influence of the contextual prices on forming a

judgment of the target brand’s price.

Prior research investigating such contextual judgments often supports Parducci’s (1965)

range-frequency theory which predicts that judgments contrast from specific prices in the

contextual distribution. Specifically, the target will appear less expensive (more expensive) when

increasing (decreasing) the endpoints of the price distribution (i.e., shifting the range) or

including additional prices that are more expensive (less expensive) than the target (i.e., shifting

the frequency). To illustrate, if there are many cheeses cheaper than $28.95, then the consumer

will judge $28.95 to be more expensive than when there are many cheeses more expensive than

$28.95. This contrastive result applies to many stimuli including contextual judgments of prices

(Janiszewski & Lichtenstein, 1999; Niedrich, Sharma, & Wedell, 2001; Niedrich, Weathers, Hill,

& Bell, 2009), facial features (Pettibone & Wedell, 2007; Wedell & Pettibone, 1999), and

behavior (Martin, 1986). We propose a moderator on this contrast effect in price perceptions.

We demonstrate that the influence of context on price judgment depends on construal

level. Construal level theory (Trope & Liberman, 2003; Trope, Liberman, & Wakslak, 2007)

posits that consumers construe stimuli on a continuum of abstraction ranging from low-level,

concrete construal to high-level, abstract construal. Recent research shows that construal level


influences advertisement and product evaluations (Hong & Lee, 2010; Lee, Keller, & Sternthal,

2010; Yan & Sengupta, 2011; Yang, Ringberg, Mao, & Peracchio, 2011), purchase intentions

(Labroo & Patrick, 2009; Liberman & Trope, 1998; White, MacDonnell, & Dahl, 2011), and

choice confidence (Tsai & McGill, 2011). We uniquely show how construal also influences

judgments of target stimuli within a larger consideration set (i.e., contextual price judgments).

Specifically, consumers processing at high construal assimilate judgments of a target toward the

central tendency of the price distribution. Returning to the cheese example, if there are more

cheeses priced lower than $28.95, the consumer will judge $28.95 to be less expensive than if

there are more cheeses priced higher than $28.95. This is at odds with the contrast effect

predicted by range-frequency theory.

The key contribution of this paper is that it establishes construal level as a boundary

condition for the robust contrast effect in psychophysical judgments predicted by range-

frequency theory. While previous research demonstrates that processing styles affect how

information is integrated (e.g., Corneille, Yzerbyt, Pleyers, & Mussweiler, 2009; Cunha &

Shulman, 2011; Laran, 2010; Russo, Carlson, Meloy, & Yong, 2008), the present research nests

the psychophysics of price perceptions into the broad construal-level theory. The findings open

up the multitude of tools at a marketer’s disposal for shaping a consumer’s construal level (for

reviews see Liberman, Trope, & Wakslak, 2007; Trope & Liberman, 2010) to also be used to

influence price perceptions.

The paper is organized as follows. First, we review relevant literature on contextual

judgments and construal level. Next, we develop the conceptual link between the two constructs

and make predictions. We report two experiments in which construal level is manipulated via

affective (experiment 1) and categorization tasks (experiment 2). The results are consistent with


the predictions that when low-level construal is activated, price judgments follow the standard

contrast effects predicted by range-frequency theory. However, when high-level construal is

activated, price judgments assimilate toward the mean price of the consideration set. The latter is

contrary to many findings in the literature on contextual judgments.

Literature Review

Consumer research on price perceptions finds that when making contextual price

judgments, consumers compare and contrast a target stimulus to other specific stimuli in the

consideration set (Cooke, Janiszewski, Cunha, Nasco, & De Wilde, 2004; Janiszewski &

Lichtenstein, 1999; Niedrich, et al., 2001; Niedrich, et al., 2009). These findings are consistent

with Parducci’s (1965) range-frequency theory predictions. For example, Janiszewski and

Lichtenstein (1999) show that prices for various foods (cereal, cookies, snacks, soup) are viewed

as more expensive when less expensive products are added to the context. Niedrich et al. (2001)

show that prices of airline tickets and 2-liter soda bottles are more attractive (i.e., less expensive)

when more expensive prices are added to the context. Cooke et al. (2004) demonstrate that

pieces of cheese are judged to be larger when smaller pieces of cheese are added to the

consideration set. However, there are boundary conditions on the contrast effect. Cooke et al.

(2004) argue that consumers have an inherent preference for a moderate cost-benefit trade off.

When the cost-benefit tradeoff is salient, preference judgments assimilate (rather than contrast)

toward changes in the range of the context. Niedrich et al. (2009) find that range effects are

stronger for consumers who frequently use coupons due to enhanced weighting of end-points as

reference prices. Additionally, they find that frequency effects are stronger for consumers having

prior exposure to the trend of prices in the set due to increased accessibility of the reference

prices. Cunha and Shulman (2011) find that when consumers adopt a generalization information


processing goal, price judgments assimilate (rather than contrast) toward changes in the context.

In the same vein as this developing stream of literature, the present research contributes by

identifying an important moderator on the contrast effects predicted by range frequency theory.

We demonstrate that the influence of context on price judgment is moderated by construal level.

Construal level theory (Liberman, et al., 2007; Trope & Liberman, 2003; see Trope &

Liberman, 2010 for a review) contends that consumers typically construe stimuli, both

perceptually and conceptually, on a continuum of abstraction. This continuum ranges from high-

level, abstract construal to low-level, concrete construal. Abstract (vs. concrete) construal is

activated by merely perceiving stimuli as physically distant vs. near (Bar-Anan, Liberman, &

Trope, 2006), as occurring in the distant vs. near future (Liberman, Sagristano, & Trope, 2002),

or as being unlikely vs. likely to occur (Wakslak, Trope, Liberman, & Alony, 2006).

There are two facets of construal-levels that are of particular interest to the present

research. First, when consumers process information at high construal they categorize objects

into broad categories (e.g., clothes), indicative of focusing on the superordinate, global features

of stimuli. When consumers process information at low construal they categorize objects into

subordinate categories (e.g., long-sleeved shirts), based on specific features of stimuli (Liberman,

et al., 2002; Trope & Liberman, 2000; Trope, et al., 2007; Wakslak, Nussbaum, Liberman, &

Trope, 2008). Second, consumers processing at high construal perceive greater similarity

between stimuli whereas consumers processing at low construal perceive greater dissimilarity

between stimuli (Forster, 2009; Forster, Liberman, & Kuschel, 2008; Henderson, Fujita, Trope,

& Liberman, 2006; Levy, Freitas, & Salovey, 2002; Liberman, et al., 2002). Given that

perceptual processes such as the ones explained by range-frequency theory may depend on how

individuals establish standards of comparison (Wedell, Hicklin, & Smarandescu, 2007), it is


plausible that construal level influences how consumers make price judgments. This can be

expected because construal level changes the way individuals process and categorize stimuli.

Next, we describe how construal level and perceptual processes may interact in shaping

consumers’ price judgments.

Conceptual Development

We posit that construal level influences which features of the contextual stimuli will be

differentially salient and thus used as standard of comparison or reference points. The range-

frequency account of price judgments argues that the range and frequency of the contextual

distribution serve as reference points. Range and frequency are subordinate features because they

refer to specific characteristics of the stimuli available for processing. If construal level

influences the breadth of categorization of stimuli as discussed above, consumers should be more

likely to attend to the range and frequency of a distribution when a lower construal level is

activated during the processing of price information. Alternatively, prior pricing research also

proposes a measure of central tendency of prices such as the mean of a consideration set as a

potential referent relative to which consumers might make judgments (e.g., Helson, 1964;

Kalyanaram & Winer, 1995; Monroe, 1990). Such a referent serves as a superordinate summary

measure which captures the typicality of the elements of the set. Based on our theorizing of the

effect of construal level on the breadth of categorizations, consumers should be more likely to

attend to a summary measure of the distribution such as its mean when a higher construal level is

activated during the processing of price information. These predictions can be summarized as

follows:


Hypothesis 1a: Consumers using low (vs. high) construal will be more sensitive to changes to

the range and/or frequency (vs. mean) of the price context when forming price judgments about a

target price.

Additionally, extant research posits that whether judgments of a target assimilate or

contrast relative to a reference point depends upon whether the consumer is searching for

similarities or dissimilarities (Chien, Wegener, Hsiao, & Petty, 2010; Forster, et al., 2008;

Mussweiler, 2001a, 2001b, 2003). As described in the literature review, high construal leads to

inclusionary processing and perceived similarity whereas low construal leads to exclusionary

processing and perceived dissimilarity. It therefore follows that consumers processing at high

(vs. low) construal are more likely to perceive similarity and make assimilative contextual

judgments. Alternatively, consumers processing at low (vs. high) construal are more likely to

perceive dissimilarity and make contrastive contextual judgments. This prediction is formally

stated as follows:

Hypothesis 1b: Judgments of a target by consumers using high (low) construal will assimilate

(contrast) relative to a contextual reference point.

Combined, these two hypotheses predict a rich pattern of price judgments. They state that

consumers using high level, abstract construal will be sensitive to changes in the mean of the

price distributions (H1a) and their price judgments will assimilate (H1b) toward changes in the

mean of the consideration set. In comparison, consumers using low-level, concrete construal will


be sensitive to changes in the range or frequency of the consideration set (H1a) and their price

judgments will contrast away (H1b).

Experiment 1

In experiment 1, we manipulated high versus low construal via an affect task and

observed participants’ price judgments. Negative and positive affect are known to activate low

and high construal respectively (Labroo & Patrick, 2009). Specifically, negative affect tends to

encourage focus on low-level, concrete aspects of stimuli (Gasper, 2004; Gasper & Clore, 2002)

and item-specific processing (Bauml & Kuhbandner, 2007; Clore & Huntsinger, 2007).

Alternatively, positive affect tends to encourage focus on global aspects of stimuli (Gasper,

2004; Gasper & Clore, 2002) and enhanced usage of superordinate categorical associations such

as stereotyping (Bodenhausen, Kramer, & Susser, 1994; Isbell, 2000).

Method

One-hundred and twenty four undergraduates were randomly assigned to one of the 6

between-subjects conditions. The mixed design was a construal (low vs. high) by price context

(control, mean-shift, range-shift) with three rounds of 9 price ratings. Construal and context were

between-subjects factors. Participants read instructions stating that they would perform a task to

assess their ability to be socially empathetic. Next, they read instructions stating: “Please read the

following excerpt from a news magazine. Upon completion you will be asked to reflect on the

feelings that the characters in the story must have experienced.” In the low construal condition

they saw two negative news stories, in the high construal condition they saw two positive news

stories. After each story, participants wrote a paragraph reflecting the feelings that the characters

portrayed must have experienced (task adapted from Meyers-Levy & Tybout, 1997). Participants

then rated their current affective state along four dimensions: happiness (1 – sad, 7 – happy),


mood (1 – bad mood, 7 – good mood), irritation (1 – irritable, 7 – pleased), and depression (1 –

depressed, 7 – cheerful).

Following the construal level manipulation, participants saw instructions informing them

that they would next rate a series of gourmet cheeses in terms of expensiveness. Price

distributions were manipulated such that, relative to the control condition, the price of the most

expensive product was raised in the range-shift condition, but the mean remained constant. In the

mean-shift condition the mean of the distribution was raised relative to the control condition but

the highest price remained constant (see Appendix A for the full set of prices). The only pieces

of information participants saw was a price and a sentence asking them to rate the expensiveness

using a sliding scale (0 - very low price, 100 - very high price). There were three rounds of

ratings for 9 prices each (6 non-target and 3 target prices). The prices were shown sequentially

with a randomized order of presentation for each round of ratings for each participant.

Results

A mean composite of the four affect measures (Cronbach’s alpha = 0.92) showed that

participants had greater positive affect in the positive-affect/high construal (M = 5.22) than in the

negative-affect/low construal condition (M = 4.50, t(122) = 3.39, p < .001).

The model testing price judgments was construal by context with two rounds of price

ratings (first round treated as a practice round), and three target prices (which were constant

across the 3 price context conditions). A repeated measures ANOVA on the expensiveness

ratings for the target prices showed a statistically significant interaction between the construal

and context factors (F(2,118) = 3.27, p = .04). The round of rating and target price replicate

factors did not interact with each other or with the construal and context factors. Thus, we

collapsed the expensiveness ratings across the levels of these two replicate factors for reporting


the mean of the expensiveness ratings. In the low construal condition, there was no reliable

difference in ratings for target prices across the mean-shift (M = 56.27) and control conditions

(M = 55.87; F(2, 118) < 1), but the target prices in the range-shift were rated as statistically

significantly lower (M = 42.96) than those in the control condition (F(2, 118) = 4.09, p = .02).

This result is consistent with judgments contrasting away from the direction of change of the

range of the distribution.

In the high construal condition, ratings for target prices were statistically significantly

higher in the mean-shift (M = 57.67) than in the control condition (M = 46.54; F(2, 118) = 3.52,

p = .03). This result is consistent with judgments assimilating toward the direction of change of

the mean of the distribution. We found no reliable difference in ratings between the range-shift

(M = 52.74) and the control condition (F(2, 118) = 1.45, p = .24). These results are summarized

in Table 1 and depicted in Figure 1. Overall, the results of experiment 1 support the hypothesized

relationship between construal and price judgments.

Discussion

Experiment 1 used an affect task to manipulate construal level and found support for the

prediction that construal level moderates contextual pricing effects. Specifically, whereas

participants using high construal responded to an increase in the mean, they ignored an increase

to the range. In comparison, participants using low construal responded to an increase in the

range but ignored an increase to the mean. This supports hypothesis 1a in which construal level

influences which features of the stimuli are salient and thus serve as the reference point for

contextual judgments. Additionally, whereas participants in high construal judged target

products’ prices as more expensive in response to the mean increase (assimilation), participants

in low construal judged target prices to be less expensive in response to the range increase


(contrast). This supports hypothesis 1b in which construal level influences perceived similarity

and thus the direction of context effects. The contrastive response of participants in the low

construal condition is consistent with the predictions of range-frequency theory and a large body

of consumer research in price perception. The assimilative response of participants in the high

construal condition, however, is contrary to much of the prior research on price perceptions.

It should be noted that in the range-shift condition we changed the filler prices of ranks 2,

3, 7, and 8 in addition to the change of the upper endpoint (relative to the control). This was

necessary in order to hold the mean constant and provide a clean test between the two

predictions: sensitivity to the mean versus sensitivity to the range. Taken alone, one might argue

that the change in the perceptions of the target prices (between the range-shift and the control)

was due to the change in the other prices. However, this argument is not supported by the data

because these same filler prices were also changed in the mean-shift condition with no effect in

the low construal condition. Nevertheless, we better control for price changes in Experiment 2

and use an alternative manipulation of construal level.

Experiment 2

In experiment 2, we altered the contextual manipulation to simultaneously shift the mean,

the frequency, and the range of the distribution so as to make a more stringent test of our

hypotheses. We also used a cognitive (rather than affective) task to activate different levels of

construal. Specifically, we used a categorization task based on Yamauchi & Markman’s (1998)

category-learning task to activate different levels of construal and observed how participants

judged prices. In addition, we provide direct evidence of activations of varying construal levels.

We hypothesize that classification learning, when one categorizes stimuli based on the

label of the category, activates low-level, concrete construal because it requires a focus on the


specific features of the stimuli. In comparison, inference learning, when one categorizes stimuli

based on the features that resemble the prototype of the category, should activate high-level,

abstract construal because it requires making inferences about the global traits of the category

(Markman & Ross, 2003; Yamauchi & Markman, 1998, 2000). Conceptually similar procedures

are used in prior research to manipulate construal (Fujita, Trope, Liberman, & Levin-Sagi, 2006;

Hong & Lee, 2010) wherein participants see a list of nouns (e.g., dog) and either generate a

category label (e.g., pet; high construal) or an exemplar (e.g., golden retriever; low construal).

Method

Participants were seventy one undergraduates who were randomly assigned to one of the

4 between-subjects conditions. The design was construal (low vs. high) by price context (low-

price skew vs. high-price skew) with three rounds of 13 price ratings mixed design. The

construal and price context factors were between-subjects factors.

Participants read instructions informing them that they would learn about gourmet

cheeses. We used a family-resemblance category structure with brands (Thab vs. Lork) as

category labels and cheese attributes as features [rind (wax vs. natural), color (white vs. yellow),

curd process (milling vs. pressing), and type of rennet (animal vs. vegetable)]. The two

categories had four members each. Each member of the category had three features of the

prototype of its own category and one exception feature that matched a feature of the prototype

of the opposing category. Feature and brand labels were randomly assigned to categories for

each participant. In the low construal (classification-learning) condition, participants saw the

four features and a “?” for the brand-category label that they had to predict. Participants in this

condition must determine the brand by focusing on specific features, thus activating low-level

construal. In the high construal (inference-learning) condition, participants saw the brand, three


features and a “?” for a missing feature (which was never the exception feature) that they had to

predict. Participants in this condition must determine the feature by focusing on the

superordinate category label (the brand), thus activating high-level construal. After each

prediction, participants received feedback. After several blocks (8 maximum or perfect

performance in a given block) of predictions for the 8 cheeses, participants proceeded to the

price-judgment task.

A pre-test using a sample from the same population of the main study revealed that

participants in the low construal (classification learning) condition preferred to make a

hypothetical purchase in the near future whereas participants in the high construal (inference

learning) condition preferred the more distant future (Mlow construal = 6.2, Mhigh construal = 8.2; t(118)

= 2.23, p < .05). Participants responded on a 13-point scale used in prior research (Hong & Lee,

2010) to assess construal-level activation anchored by 1-“Today” and 13-“In 6 months”. This

result confirms that our procedure was a successful manipulation of construal level (Liberman, et

al., 2002; Liberman, et al., 2007; Trope & Liberman, 2010).

The instructions for the price-judgment task replicated those of experiment 1. The price-

context manipulation used the structure from Cooke, Janiszewski, Cunha, Nasco, and De Wilde’s

(2004) low- and high-skew conditions (see Appendix A for the full set of prices). Using the low-

and high-skewed context conditions allowed for simultaneous manipulation of range, frequency,

and mean of the consideration set; a standard procedure in testing range-frequency theory. In the

low-skewed condition, the range, frequency, and mean of the consideration set were all shifted

downward. In the high-skewed condition, the range, frequency, and mean of the set were all

shifted upward. Using this context manipulation, the high and low construal conditions make

competing predictions. Specifically, participants in the low construal condition should judge


target products’ prices as less expensive in the high-skewed (vs. low skewed) context; a

contrastive response. In comparison, participants in the high construal condition should judge

target products’ prices as more expensive in the high-skewed (vs. low-skewed) context; an

assimilative response.

Results

The model testing price judgments was a construal (low vs. high) by price context (high-

skew vs. low-skew) with two rounds of ratings and 5 target prices. The number of categorization

blocks performed by each participant was used as a covariate to control for differential learning

across construal conditions. A repeated-measures ANCOVA showed statistically significant

interaction between learning tasks and context (F(1,66) = 16.61, p < .01). Once again the round

of rating and target price replicate factors did not interact with each other or with the construal

and context factors and we collapsed the expensiveness ratings across the levels of these two

replicate factors for reporting purposes. In the low construal condition target prices were judged

to be less expensive in the high- (M = 45.28), than in the low-skew condition (M = 58.45;

F(1,66) = 8.46; p = .01) – a contrast effect. In the high construal condition target prices were

perceived as more expensive in the high- (M = 53.37) than in the low-skew condition (M =

37.62; F(1,66) = 8.05; p < .01) – an assimilation effect. These results are summarized in Table 1

and depicted in Figure 2.

Discussion

Experiment 2 showed further support for the prediction that construal moderates context

effects on consumer judgments of price. Experiment 2 used an experimental paradigm that

manipulated construal level using a cognitive task and a different manipulation of price context

than that of experiment 1. Experiment 2 also pitted the effects of high and low construal level in


direct opposition to one another. The contrastive response to changes to the range and frequency

of stimuli predicted by range-frequency theory was again prevalent for participants using low

construal. Specifically, participants in the low construal condition judged target products’ prices

as less expensive in the high-skew (i.e., higher range, frequency, and mean) context than in the

low-skew context. In comparison, an assimilative response was prevalent for participants using

high construal. Specifically, participants in the high construal condition judged target products’

prices as more expensive in the high-skew context than in the low-skew context. This result

supports the predicted interactive effect of context and construal level on price judgments. The

findings further support the theory that construal level and relative price position are factors that

should be considered simultaneously when crafting marketing strategy.

General Discussion

This research demonstrates that construal level moderates the process involved in price

judgments. Previous research on contextual judgments consistently supports Parducci’s (1965)

range-frequency theory (e.g., Cooke, et al., 2004; Janiszewski & Lichtenstein, 1999; Niedrich, et

al., 2001; Niedrich, et al., 2009; Smith, Diener, & Wedell, 1989; Wedell & Pettibone, 1999).

However, we offer compelling evidence of an important moderator of context effects. Upon

activating concrete, low-level construal via negative affect and classification learning, we

observed price judgments that were consistent with range-frequency theory. Upon activating

abstract, high-level construal via positive affect and inference learning, we observed price

judgments assimilating to a global feature (the mean price) of the consideration set. By obtaining

both assimilation and contrast effects when the context and type of judgments were held

constant, our research adds to a growing body of literature focused on identifying processes,


boundary conditions, and models for contextual judgment (see Cooke, et al., 2004; Cunha &

Shulman, 2011; Hicklin & Wedell, 2007; Wedell, et al., 2007; D. H. Wedell, 2008).

Our particular methods for activating high construal were positive affect and inferential

learning. To reconcile our findings with past literature, the success of range-frequency theory in

predicting contextual judgments in prior research may have arisen because individuals were most

often likely to be in a neutral mood (Isen, Nygren, & Ashby, 1988) or not making inferences

about the categories of stimuli at the time of judgment. Nevertheless, our research shows an

important moderator for the expected outcome of contextual judgments and sheds light on the

processes involved.

Although social psychology research shows assimilation and contrast in social

judgments, the leading theories therein do not predict our results. Under the selective

accessibility hypothesis (Mussweiler, 2001a, 2001b, 2003) assimilation or contrast in social

judgments may occur depending on the accessibility of information regarding the target stimulus

and as well as information regarding a standard of comparison (i.e., context). In our study, the

manipulated level of construal produced assimilation and contrast with both target information

and context information were held constant across the two construal conditions. Likewise, in

contrast with the Interpretation Comparison Model (ICM; D.A. Stapel, 2007; D. A. Stapel &

Koomen, 2001a, 2001b), our procedure did not vary the ambiguity of the target or the ambiguity

of the contextual information. Further, Avramova and Stapel (2008) suggest that when

individuals are exposed to exemplars of trait-implying behavior, positive (negative) mood

activates indistinct (distinct) information to be used as a standard of comparison. Target

judgments will assimilate if indistinct information (e.g., the trait “expensiveness”) is activated

and contrast if a distinct information (e.g., an exemplar of an expensive product) is activated (for


a review of the ICM's information distinctness hypothesis see D.A. Stapel, 2007). Our findings

cannot be explained simply by information distinctness because when participants in a positive

(negative) mood were exposed to exemplars in the range-shift (mean-shift) condition of

experiment 1, target judgments did not assimilate (contrast) as would be predicted by the

distinctness hypothesis.

Contextual price judgments have clear and important implications for marketing

managers. Marketers are generally aware of the need to consider the relative price of their

products when formulating pricing strategies. This research highlights the additional need to

consider construal level as a significant factor that moderates the influence of contextual prices

on judgments. While range-frequency successfully explains the influence of contextual prices

when consumers are using low construal, it fails to predict judgments by consumers using high

construal. Thus, marketers must consider not only the relative price position of their products but

also the level at which their products are likely to be construed. Years of research demonstrate a

variety of tools that marketers can use to activate construal levels (for reviews see Liberman,

Trope, & Wakslak, 2007; Trope & Liberman, 2003), which we have shown can also be used to

impact perceptions of prices within an assortment. In further illuminating the processes involved

in these contextual price judgments, the results we reported herein inform both theory and

practice.


Appendix A

Price Stimuli1

Experiment 1 Experiment 2

Control Mean-shift Endpoint-shift Low-

Skewed High-

Skewed

Prices 1 3.95 3.95 3.95 4.94 6.352 7.40 14.20 6.70 5.41 8.233 10.85 14.25 9.50 5.88 9.174 14.30 14.30 14.30 6.35 10.115 17.75 17.75 17.75 6.82 11.056 21.20 21.20 21.20 7.29 11.997 24.65 31.45 24.01 7.76 12.468 28.10 31.50 26.76 8.23 12.939 31.55 31.55 35.58 9.17 13.40

10 10.11 13.8711 11.05 14.3412 11.99 14.8113 13.87 15.28

Distribution’s Mean 17.75 20.02 17.75 8.37 11.85

1 Prices are in US$. Target prices in bold. Endpoints italicized


Figure 1

Low (High) Construal Lead to Contrast (Assimilation) Only When the Range (Mean) was

Shifted (E1)

Figure 2

Low (High) Construal Lead to Contrast (Assimilation) Relative to Shifts in the Context

(E2)

55.87

46.54

56.2757.67

42.96

52.74

30

35

40

45

50

55

60

Low Construal High Construal

Expensiveness

Control Mean‐Shift Range‐Shift

58.45

37.62

45.28

53.37

30

35

40

45

50

55

60

Low Construal High Construal

Expensiveness

Low‐Skewed High‐Skewed


Table 1

Low (High) Construal Results in Contrast (Assimilation)1

** p < .05. Matching subscripts (abcdef) indicate which cells were compared to one another in the analysis.

Experiment 1 Experiment 2

Control Mean‐Shift Range‐Shift Low‐Skewed High‐Skewed Direction of Effect

Low Construal 55.87ab 56.27a 42.96b** 58.45e 45.28e** Contrast

High Construal 46.54cd 57.67c** 52.74d 37.62f 53.37f** Assimilation


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