The Impact of Cultural Tightness–Looseness on Consumers' Price Sensitivity

ABSTRACT The role of cultural tightness–looseness in consumers' price sensitivity has been under‐explored. This study fills this gap by examining the link between cultural tightness–looseness and consumers' price sensitivity, the underlying mechanism, and boundary conditions. In a series of seven studies using secondary and experimental data, different product categories, and various operationalizations of cultural tightness–looseness, we find that consumers in a tight culture are less price sensitive due to their stronger price‐quality associations. For this reason, product type, firm reputation, and quality variation should moderate the effect, such that the effect of cultural tightness‐looseness on price sensitivity diminishes for hedonic (vs. utilitarian) products, for firms known for CSR (vs. product quality), and when quality variation is reduced (vs. unchanged or enhanced). We additionally rule out other cultural values (e.g., self‐construal, power distance belief, local‐global identity) as possible rival explanations of our results, and distinguish our work from Minchael and Saini. This study makes contributions to the literature on cultural tightness−looseness, price sensitivity, and price‐quality perceptions. It also provides specific tools for marketers to use in advertisements and point‐of‐purchase materials to muffle price sensitivity and encourage consumer purchase.