Economics Insights @ CBS

Technologies are becoming increasingly autonomous, able to make decisions and complete tasks on behalf of consumers. Virtual assistants already take care of grocery shopping by replenishing used up ingredients while cooking machines prepare these ingredients and implement recipes. In the future, consumers will be able to delegate substantial parts of the shopping process to autonomous shopping systems.

Technological advances have resulted in a hyperconnected world, requiring a reassessment of branding research from the perspectives of firms, consumers, and society. Brands are shifting away from single ownership to shared ownership, as heightened access to information and people is allowing more stakeholders to cocreate brand meanings and experiences alongside traditional brand owners and managers.

This research examines how drip pricing--a strategy whereby a firm advertises only part of a product's price upfront and then reveals additional mandatory or optional fees/surcharges as the consumer proceeds through the buying process--affects consumer choice and satisfaction. Across six studies, we find that when optional surcharges are dripped (vs. revealed upfront) consumers are more likely to initially select a lower base priced option which, after surcharges are included, is often more expensive than the alternative.