We analyze a large-scale field test conducted with a mail-order catalog firm to investigate how customers react to premium prices for larger sizes of women's apparel. We find that customers who demand large sizes react unfavorably to paying a higher price than customers for small sizes. Further investigation suggests that these consumers perceive that the price premium is unfair. Overall, premium pricing led to a 6% to 8% decrease in gross profits.
No takes yet. Share an insight, caveat, or question.
Anderson et al. (2008) studied this question.
Synapse has enriched 5 closely related papers on similar clinical questions. Consider them for comparative context: