The Moderating Effects of Message Framing and Source Credibility on the Price-Perceived Risk Relationship

Abstract

One factor that research has identified as a critical determinant of consumers' willingness to buy a new product or brand is the perceived risk associated with the purchase. Consequently, a better understanding of the factors affecting consumers' perceptions of the financial and performance risk entailed by the purchase of a new brand is of both theoretical and pragmatic importance. Previous research has suggested that a new product's price affects consumers' perceptions of risk. The current article extends and integrates previous research by proposing that the effect of price on consumers' perceptions of risk is moderated by two communication factors: message framing and source credibility. The results of an experiment support the predictions that the influence of price on consumers' perceptions of performance risk is greater when the message is framed negatively or the credibility of the source is low. In addition, the results support the prediction that the effect of price on consumers' perceptions of financial risk is greater when the message is framed positively.