Testing and Verification of the Zero-Price Effect in Touristic Products

Abstract

Consumers are affected from similar factors while deciding to purchase a product or a service. Although there is a general acceptance that psychology plays the most important role at the center of these factors; the studies on this subject have revealed that cognitive biases and irrational elements are also very important. These studies have also indicated that one of the factors among the irrational elements that affect the consumer behavior is zero price sensitiveness. This study aims to test whether zero price has an effect on decision making process towards tourism. In regard to this goal, two different hotels with two components of room and breakfast are determined; and although that the other hotel is the selected option, when a certain component's price within the product is fixed to zero, it has been assumed that demand for that product would increase abnormally. Also, Monty Hall problem was applied to tourism and tested in order to examine whether the choices about zero price are realized randomly or not. Within the scope of this study, an experiment relying on hypothetical selection method was conducted by 159 lecturers. The zero price effect was found to be significant in the model used in the experiment and a significant difference was found between the responses to the Monty Hall problem.