In the context of used trading, sellers commonly provide various information to facilitate the transaction and achieve a higher selling price. Among such information, the price that the seller claims to have paid when purchasing the product to be sold...
In the context of used trading, sellers commonly provide various information to facilitate the transaction and achieve a higher selling price. Among such information, the price that the seller claims to have paid when purchasing the product to be sold can serve as an external reference price. This study examines the impact of the seller’s purchase price claim on the buyer’s internal reference price and purchase intention.
Based on two survey-based experiments, we find that the effect of the purchase price claim is contingent on whether the information necessary to evaluate the claim’s appropriateness and reliability is provided, as well as on the lowest and highest selling price of the new product. Specifically, when such information is available, an exaggerated purchase price claim leads to lower internal reference price and purchase intention, and the appropriateness judgment mediates this relationship. In contrast, when the information is absent, exaggerating the purchase price claim does not affect the buyer’s internal reference price and purchase intention. The findings contribute to the literature by introducing a novel external reference price concept and examining its underlying mechanism. Furthermore, they highlight the importance of managing purchase price claims to enhance the trust and completion rate of transactions in the context of used trading platforms.