Abstract
When evaluating the net impact of a series of percentage changes, we predict that consumers may employ a "whole number" computational strategy that yields a systematic error in their calculation. We report on three studies conducted to examine this issue. In the first study we identify the computational error and demonstrate its consequences. In a second study, we identify several theoretically driven boundary conditions for the observed phenomenon. Finally we demonstrate in a real-world retail setting that, consistent with our premise, sequential percentage discounts generate more purchasers, sales, revenue, and profit than the economically equivalent single percentage discount.
Original language | English |
---|---|
Pages (from-to) | 327-340 |
Number of pages | 14 |
Journal | Journal of Consumer Research |
Volume | 34 |
Issue number | 3 |
DOIs | |
State | Published - 2007 |
ASJC Scopus subject areas
- Business and International Management
- Anthropology
- Arts and Humanities (miscellaneous)
- Economics and Econometrics
- Marketing