Something old, something new: the role of partitioned pricing in consumers’ preference for new versus used products

Abstract

PurposeThis research aims to represent an initial exploration of how partitioned pricing influences consumers’ purchase decisions of new versus used products from the theoretical perspectives of prospect theory and gain/loss decision frames.Design/methodology/approachFour experiments to test the hypotheses with multiple product categories have been conducted.FindingsResults from a series of experimental studies find that consumers prefer partitioned pricing over all-inclusive pricing for new products, whereas all-inclusive pricing is more preferred for used products. In addition, the authors demonstrate that a high-quality brand can reverse this effect for used products; specifically, consumers prefer partitioned pricing over all-inclusive pricing for a used product with a high-quality brand.Originality/valueThis research contributes to the literature on second-hand consumption by examining the impact of pricing strategies on consumer purchase decisions of new versus used products. This study deepens our understanding of consumer decision-making for new versus used products and it provides implications for bolstering sustainable consumption.