Price Information Search and Bargaining Behaviors: A Simultaneous Examination of their Relationships and Antecedents

Abstract

To obtain a better purchase deal, consumers often engage in price information search and/or bargaining with the seller. While they can utilize these behaviors as substitute means to achieve the objective, this may not always be the case. This study proposes a complementary view of price information search and bargaining efforts and simultaneously examines factors that may influence the relative utilization between these two behaviors. Within this view, we expected a positive relationship between price information search and bargaining efforts. Several factors, including perceived budget constraint and price dispersion were hypothesized to increase both price information search and bargaining efforts, while perceived difficulty of price comparison and perceived time constraint were hypothesized to reduce both behaviors. A cellphone purchase in the Indonesian retail market was chosen in this study. To test the hypotheses, we conducted two similar recursive structural models, except for the path between price information search and bargaining efforts. In one model, the path goes from price information search effort to bargaining effort, while in the other model is the opposite. Supporting the complementary view, the results showed a positive relationship between price information search and bargaining effort. Both behaviors were positively influenced by perceived price dispersion. Perceived budget constraint was found to increase bargaining effort while perceived time constraint was found to reduce it. Finally, perceived difficulty of price comparison among stores was found to only reduce the price information search effort.