The Effect of Dynamic Pricing on Holiday Purchase Intentions: Moderated Mediation Role of Perceived Risk

Abstract

This study targets to measure the effect of dynamic pricing offers on the purchase intentions of consumers for a winter holiday by taking into consideration a moderated mediator role of perceived risk on this effect. The study employs an experimental design with discount level and timing of the offer (offer recency) as the manipulated conditions. The findings confirm that discount offers have positive direct effect and perceived risk has a negative direct effect on purchase intentions. The levels of discount and perceived risk, independently from each other, determine the level of purchase intentions. On the other hand, the effect of discount offers on purchase intentions is mediated by the perceived risk level of consumers. Finally, the timing of the discount offers moderates the effect of perceived risk on purchase intentions and eventually generates a moderated mediation role for perceived risk on the influence of discount offers on purchase intentions. Based on the findings of this study, some practical implications are provided.