The Bundling Strategy: The One-Click Effect on Loss Aversion

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Title: The Bundling Strategy: The One-Click Effect on Loss Aversion
Authors: Nicolau, Juan Luis | Sellers Rubio, Ricardo
Research Group/s: Marketing
Center, Department or Service: Universidad de Alicante. Departamento de Marketing
Keywords: Bundling | Booking | Loss aversion | Airfares | Low cost
Knowledge Area: Comercialización e Investigación de Mercados
Issue Date: 1-May-2020
Publisher: SAGE Publications
Citation: Journal of Hospitality & Tourism Research. 2020, 44(4): 704-712. doi:10.1177/1096348019876692
Abstract: This research aims to determine different levels of loss aversion in the context of price responsiveness and service bundling. Considering that nonlinearities in price responses may exist in a bundling strategy, this research tests the existence of different degrees of loss aversion, depending on whether an individual books one service independently of another (e.g., an airline ticket independently of accommodation) or as part of a bundle (e.g., a package that includes an airline ticket plus accommodation). We estimate a random parameter logit model. Empirical application shows that people who book a flight independently of accommodation are more loss averse than those who book a package that includes flight and accommodation. To explain this result, we propose the one-click effect so that people who find a price higher than expected (loss aversion) are more willing to accept it if the product is included in a bundle.
ISSN: 1096-3480 (Print) | 1557-7554 (Online)
DOI: 10.1177/1096348019876692
Language: eng
Type: info:eu-repo/semantics/article
Rights: © The Author(s) 2019
Peer Review: si
Publisher version:
Appears in Collections:INV - MKT - Artículos de Revistas

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