Pricing conditions: We manipulated price changes in the
online store to investigate how these influenced participants’
price expectations updating and purchasing decisions.
Participants were randomly assigned to one of five
different pricing environments for the duration of the
experiment. About half of (week, SKU) couples are in
the first environment where prices remain constant. The
other four pricing environments differed in the rate of
change (gradual vs. sudden) of SKU prices and the direction
of change (increase vs. decrease). In gradual change
cases, prices of the SKU moved strictly monotonically
over the weeks, whereas in the case of sudden change,
almost all the prices were changed only in the fourth
week. As normally seen in the stores, prices of SKUs
under the same brand name (within a category) moved
in tandem. Number of (week, SKU) combinations, average
percent of price change, and its standard deviation of
each pricing environment are reported in the left panel of
Table 4. There are fewer cases of “sudden increase” and
“sudden decrease” because these only happened once in
the experiment. It was ensured that SKUs were in
counterbalancing pricing environment in any particular
week. That is, whenever a participant found price increases
for some SKUs in a category, there would be price
decreases for some other SKUs in the same category