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EMAC 2020 Annual Conference


Increasing Customers’ Willingness to Pay for Digital Products: The Contingent Role of Price Communication
(A2020-63926)

Published: May 27, 2020

AUTHORS

Benedikt Alberternst, University of Paderborn; Carina Witte, University of Paderborn; Andreas Eggert, University of Paderborn

KEYWORDS

digital products; price communication; willingness to pay

ABSTRACT

Many customers have a low willingness to pay for digital products. Yet, insights on how to increase customers’ willingness to pay are scarce. The present research investigates price communication, i.e. accompanying information that justifies the price of the digital product, as a means for increasing customers’ willingness to pay for digital products. Drawing on equity theory, this research theoretically argues and empirically shows that price communication (vs. no price communication) increases customers’ perceived price fairness and willingness to pay. Conducting a scenario experiment with a fitness app, we show that price communication boosts willingness to pay by 83%. The effect is strengthened as the degree of customers’ technology readiness increases.