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

© 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...

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Main Authors: Sascha Alavi, Torsten Bornemann, Jan Wieseke
Format: Default Article
Published: 2015
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Online Access:https://hdl.handle.net/2134/33440
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spelling rr-article-95050642015-03-01T00:00:00Z Gambled price discounts: A remedy to the negative side effects of regular price discounts Sascha Alavi (7198844) Torsten Bornemann (7200077) Jan Wieseke (1258515) Other commerce, management, tourism and services not elsewhere classified Uncertainty Reference price Gambled price discounts Price promotion Marketing innovation Business and Management not elsewhere classified © 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 2015-03-01T00:00:00Z Text Journal contribution 2134/33440 https://figshare.com/articles/journal_contribution/Gambled_price_discounts_A_remedy_to_the_negative_side_effects_of_regular_price_discounts/9505064 CC BY-NC-ND 4.0
institution Loughborough University
collection Figshare
topic Other commerce, management, tourism and services not elsewhere classified
Uncertainty
Reference price
Gambled price discounts
Price promotion
Marketing innovation
Business and Management not elsewhere classified
spellingShingle Other commerce, management, tourism and services not elsewhere classified
Uncertainty
Reference price
Gambled price discounts
Price promotion
Marketing innovation
Business and Management not elsewhere classified
Sascha Alavi
Torsten Bornemann
Jan Wieseke
Gambled price discounts: A remedy to the negative side effects of regular price discounts
description © 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
format Default
Article
author Sascha Alavi
Torsten Bornemann
Jan Wieseke
author_facet Sascha Alavi
Torsten Bornemann
Jan Wieseke
author_sort Sascha Alavi (7198844)
title Gambled price discounts: A remedy to the negative side effects of regular price discounts
title_short Gambled price discounts: A remedy to the negative side effects of regular price discounts
title_full Gambled price discounts: A remedy to the negative side effects of regular price discounts
title_fullStr Gambled price discounts: A remedy to the negative side effects of regular price discounts
title_full_unstemmed Gambled price discounts: A remedy to the negative side effects of regular price discounts
title_sort gambled price discounts: a remedy to the negative side effects of regular price discounts
publishDate 2015
url https://hdl.handle.net/2134/33440
_version_ 1800272375795679232