DISCOUNT PRICING.
We investigate the practice of framing a price as a discount from an earlier price, with information such as "was $200, now $100." We discuss two reasons why a discounted price—rather than a merely low price—can make a consumer more willing to purchase. First, a high initial price can indicate the s...
| Publicado en: | Economic Inquiry Vol. 58; no. 4; pp. 1614 - 1628 |
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| Autores principales: | , |
| Formato: | Artículo |
| Publicado: |
Wiley-Blackwell
Oct2020
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| Acceso en línea: | Ver este registro en EBSCOhost |
| fields | @attributes: recordID: 1 pdfLink: plink: https://search.ebscohost.com/login.aspx?direct=true&db=ssf&AN=145974808&site=ehost-live header: @attributes: shortDbName: ssf uiTerm: 145974808 longDbName: Social Sciences Full Text (H.W. Wilson) uiTag: AN controlInfo: bkinfo: jinfo: jid: 00952583 EIQ jtl: Economic Inquiry issn: 00952583 maglogo: Y pubinfo: dt: Oct2020 vid: 58 iid: 4 pid: 480 pub: Wiley-Blackwell artinfo: ui: 145974808 10.1111/ecin.12774 ppf: 1614 ppct: 14 formats: fmt: – @attributes: type: T – @attributes: type: P size: 188KB tig: atl: DISCOUNT PRICING. aug: au: Armstrong, Mark Chen, Yongmin affil: Professor, Economics Department, University of Oxford, Oxford OX1 4AL,, UK Professor, Economics Department, University of Colorado at Boulder, Boulder CO, 80309 su: Purchasing Consumers Consumer price indexes Special sales Discount prices sug: subj: Purchasing Consumers Consumer price indexes Special sales Discount prices ab: We investigate the practice of framing a price as a discount from an earlier price, with information such as "was $200, now $100." We discuss two reasons why a discounted price—rather than a merely low price—can make a consumer more willing to purchase. First, a high initial price can indicate the seller has chosen to supply a high‐quality product. Second, when a seller with limited stock runs a clearance sale, later consumers infer that unsold stock has higher expected quality when its initial price was higher. We also suggest a behavioral explanation, which is that consumers with reference‐dependence preferences are more likely to buy if they perceive the price as a bargain relative to the earlier price. Discount pricing is therefore an effective marketing technique, and a seller may wish to deceive potential customers by offering a false discount. The welfare effects of regulation to prevent fictitious pricing are subtle, with potential unintended consequences, and depend on whether consumers are sophisticated or naive. pubtype: Academic Journal doctype: Article src: R language: English refInfo: copyright: @attributes: flag: N holdings: @attributes: islocal: N |
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