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Gambled price discounts: A remedy to the negative side effects of regular price discounts

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journal contribution
posted on 18.06.2018, 08:25 by Sascha Alavi, Torsten Bornemann, Jan Wieseke
© 2015, American Marketing Association. In the context of price discounts, a special type of price promotion, in which savings depend on the outcome of a gamble and are thus uncertain, has recently achieved some popularity. The question arises as to whether such gambled price discounts (GPDs) incur the negative reference price effect-that is, a downward shift in customers' internal reference price (IRP)-which is often associated with regular price discounts (RPDs). From several studies, including two longitudinal field experiments, the authors find that GPDs indeed alleviate the negative reference price effect: IRPs and actual repurchasing tend to be lower for RPDs than for GPDs and a no-discount control condition. Moreover, the authors explore the psychological underpinnings of these effects and show that the different consequences of GPDs versus RPDs on IRPs are more pronounced if information regarding product quality is limited. The authors demonstrate that findings are robust to variations of GPD discount levels and the

History

School

  • Business and Economics

Department

  • Business

Published in

Journal of Marketing

Volume

79

Issue

2

Pages

62 - 78

Citation

ALAVI, S., BORNEMANN, T. and WIESEKE, J., 2015. Gambled price discounts: A remedy to the negative side effects of regular price discounts. Journal of Marketing, 79(2), pp. 62-78.

Publisher

American Marketing Association

Version

AM (Accepted Manuscript)

Publisher statement

This work is made available according to the conditions of the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International (CC BY-NC-ND 4.0) licence. Full details of this licence are available at: https://creativecommons.org/licenses/by-nc-nd/4.0/

Publication date

2015-03-01

Notes

This paper was accepted for publication in the journal Journal of Marketing and the definitive published version is available at https://doi.org/10.1509/jm.12.0408

ISSN

0022-2429

eISSN

1547-7185

Language

en