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Article
The Impact of magnitude salience on prix fixe menu price judgment
Caesars Hospitality Research Summit
  • Shuo Wang, Cornell University
  • Michael Lynn, Cornell University
Location
University of Nevada, Las Vegas
Start Date
8-6-2010 12:00 AM
End Date
10-6-2010 12:00 AM
Description

The flat price structure of prix fixe menus (i.e., fixed food prices and fixed service gratuities) affords restaurant operators the opportunity to present the same menu price in different ways. This report examined customers’ responses to financially equivalent prix fixe menu prices with a built-in gratuity (i.e., all-inclusive prices), a separately listed percentage gratuity and a separately listed dollar gratuity in terms of deal perception. Through an online experiment, we found that prix fixe menu prices with a percentage gratuity below (above) the conventional 15% were perceived more (less) favorably than their all-inclusive counterparts. However, there was no significant difference between prix fixe menu prices with a percentage gratuity and those with a dollar gratuity at all surcharge levels. The implications of these findings for presenting prix fixe menu prices are discussed.

Keywords
  • Information processing,
  • Menus – Prices,
  • Price format,
  • Price partitioning,
  • Restaurants,
  • Salience,
  • Service gratuities,
  • Tips
Citation Information
Shuo Wang and Michael Lynn. "The Impact of magnitude salience on prix fixe menu price judgment" (2010)
Available at: http://works.bepress.com/michael_lynn/22/