TRANSACTION UTILITY EFFECTS WHEN QUALITY IS UNCERTAIN

The existing literature finds that price discrepancy, which represents the difference between expected and observed price, helps explain bra nd choice and purchase intention. This effect is often attributed to t ransaction utility, that is, the incremental utility associated with t he surprise of observing a price lower or higher than expected. This r esearch considers the possibility, however that transaction utility is a less important determinant of choice when quality is uncertain. We propose and find that acquisition utility (perceived value for the mon ey) tends to dominate the explanation of purchase intention, but trans action utility is significant only when consumers are more certain abo ut quality. Our discussion considers the relative role of transaction utility in explaining consumer decision making and how the informative and allocative roles of price might be distinguished.