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The Impact Of Magnitude Salience On Prix Fixe Menu Price Judgment, Shuo Wang, Michael Lynn

Caesars Hospitality Research Summit

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 …