The Influence of Consumer Price Information on Retail Pricing and Consumer Behavior

Abstract

Abstract Comparative price information for major Ottawa supermarkets was collected over a twenty‐eight‐week period and published in daily newspapers during a five‐week test period. In response to the information, the dispersion of prices across stores and chains narrowed, the average level of prices of the market dropped, and consumer satisfaction increased relative to the control market. Consumers transferred patronage to the lower priced stores. Consumers indicated a willingness to pay 34¢ per week on average for the price comparison information. Estimated consumer benefits far exceeded the cost of the program.