Distortion of Price Discount Perceptions: The Right Digit Effect

We use four experiments to examine consumers’ processing of comparative regular and sale price information in advertisements. Consistent with our hypothesized right digit effect, we find that, when consumers view regular and sale prices with identical left digits, they perceive larger price discount...

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Bibliographic Details
Published in:The Journal of consumer research 2007-08, Vol.34 (2), p.162-173
Main Authors: Coulter, Keith S., Coulter, Robin A.
Format: Article
Language:English
Subjects:
Assessed values
Cognition & reasoning
Comparative advertising
Consumer behavior
Consumer research
Degrees of freedom
Discounts
Market prices
Perceptions
Perceptual distortion
Price comparisons
Sales presentations
Sales reporting
Studies
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Summary:We use four experiments to examine consumers’ processing of comparative regular and sale price information in advertisements. Consistent with our hypothesized right digit effect, we find that, when consumers view regular and sale prices with identical left digits, they perceive larger price discounts when the right digits are “small” (i.e., less than 5) than when they are “large” (i.e., greater than 5). As a result, they may attribute greater value and increased purchase likelihood to higher‐priced, lower‐discounted items. We examine alternate processing explanations for this right digit effect, as well as the moderating impact of price presentation format.
ISSN:0093-5301
1537-5277
DOI:10.1086/518526