Combining value and price to make purchase decisions in business markets

The authors investigate how purchasing managers combine information about product offerings' values and prices to make purchase decisions. The results of two field studies show that managers do not regard monetarily-equivalent changes in value and price to be the same. Using reference-dependent theory, the authors show that, rather than a single utility function, separate functions for value and price appear to underlie purchasing managers' decisions. The authors also address means of inducing managers to choose higher-valued, higher-priced product offerings