Kacy Kim (Bryant University, Rhode Island): “Consumer Resistance to Price Transparency in High-End Online Retail”

As the digital world has empowered consumers by reducing the information asymmetries between sellers and buyers, price transparency—companies’ practice of disclosing the cost breakdowns involved in product manufacturing—has become a common practice among businesses, especially in e-commerce. Although its positive impact has been widely documented and people should want to receive price information that is costless and relevant for a decision, this paper demonstrates that they sometimes want to remain ignorant about overly transparent pricing information when it pertains to high (vs. low-) premium goods.

We reasoned that price transparency elicits interpersonal want-should conflict—the should preference to receive the disclosure of cost breakdown and the want preference not to see—because it could make their judgment and decision look questionable and reduce the joy of consuming high premium products. As a result, price transparency can backfire, and thus lead to lower attitudes and purchase intentions. We further found that this tendency becomes prevalent when the premium products in e-commerce originate from a high-equity country (e.g., a fashion brand from Italy); the adverse effect of price transparency disappears when those products are learned to be manufactured in a low-equity country (e.g., a fashion brand from China).