Differentiation and Parity in Assortment Pricing

Are consumers more likely to purchase an item from an assortment in which options are priced at parity or from an assortment in which options vary in price? This research examines the influence of parity‐pricing and differentiation‐pricing strategies on consumer choice and identifies conditions in which parity pricing facilitates choice, as well as conditions in which choice is facilitated by differential pricing. In a series of three experiments, the impact of assortment pricing on choice is shown to be a function of the uncertainty associated with consumers’ preferences and the consistency of these preferences with options’ prices.