Abstract
Enlightened from self-expansion and social exchange theories, we investigate how customers’ perceived luxurious values at Michelin-starred restaurants could be translated into paying a price premium through self-expansion and customer gratitude. Data was collected from eight Michelin-starred restaurants to verify our model using multilevel modeling with Monte Carlo simulations. We found that unique, social, and functional values were the essential values for willingness to pay a premium. In contrast, the conspicuous value had neither direct nor indirect effect when considering all the other perceived values. Also, we found that customer self-expansion and gratitude were two significant mediating mechanisms. The association of social and hedonic value and pay a price premium would be only mediated by self-expansion, whereas the association of functional value and pay for price premium would be mediated by both self-expansion and customer gratitude. The sequential mediation effect was also found from unique, social, and functional values.
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