Participants who exert relatively lower effort in price information
processing, relying on PRIOR in purchase decisions,
are less likely to use current prices to update their POST as
well as their price expectation for the next visit to our online
store (i.e., PRIOR for the next trip). Hence, both of these
expectations are more stable for low-effort purchases than
for high-effort purchases, the latter being more likely to update
and use POST in decision-making. Furthermore, since individuals
making low-effort purchases are less likely to pay
attention to current price changes, they may also be less price
sensitive than individuals making high-effort purchases.
Therefore, the difference in the effort level in information
processing among individuals, via the dual-process models,
can explain consumer heterogeneity in purchasing and
updating behaviors.
While we cannot directly observe the effort level of consumers,
dual-process models predict that the existence of lowand
high-effort price information processing will lead to distinct
types of purchasing behavior and expectations updating
in our data. As a result, we propose and test the following
hypotheses: