Price versus nice? how unfavorable price comparisons help retain customers

This paper examines how a retailer can influence shopping behavior (in its favor) by providing consumers with information about its competitors' offerings. We propose that the provision of such information encourages the simultaneous evaluation of competing options such that consumers' purchasing decisions will be driven by the comparative assessment of the retailers' trustworthiness and of their price position. The results of a simulated-shopping experiment show that a retailer can benefit from encouraging consumers to compare its offerings to those of a superior competitor. Furthermore, the provision of competitor information on one purchase occasion also influences which retailer is chosen on future occasions. However, these effects are contingent upon consumers' willingness to reexamine relevant product information and the level of decision ambiguity present.