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Effectiveness of Exaggerated Advertised Reference Prices: The Role of Decision Time Pressure

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  • Krishnan, Balaji C.
  • Dutta, Sujay
  • Jha, Subhash

Abstract

Despite the prevalence of exaggerated advertised reference prices (ARPs) in retail ads and the potential for consumer vulnerability to false reference prices, research identifying boundary conditions to the effectiveness of exaggerated ARPs is scarce. We demonstrate that exaggerated ARPs are much more effective in favorably influencing consumers’ perceptions of retail offers when they feel time pressure while evaluating such offers. Further, although past research indicates that high promotion frequency weakens the effectiveness of exaggerated ARPs, we show that this is not observed when time pressure is present. We discuss the implications of this research and provide directions for future research.

Suggested Citation

  • Krishnan, Balaji C. & Dutta, Sujay & Jha, Subhash, 2013. "Effectiveness of Exaggerated Advertised Reference Prices: The Role of Decision Time Pressure," Journal of Retailing, Elsevier, vol. 89(1), pages 105-113.
    • Handle: RePEc:eee:jouret:v:89:y:2013:i:1:p:105-113
    DOI: 10.1016/j.jretai.2012.11.001
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    3. Yixin Hu & Dawei Wang & Kaiyuan Pang & Guangxing Xu & Jinhong Guo, 2015. "The effect of emotion and time pressure on risk decision-making," Journal of Risk Research, Taylor & Francis Journals, vol. 18(5), pages 637-650, May.
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    5. Kumari, Rashmi & Tatavarthy, Aruna Divya & Sahay, Arvind, 2022. "Too many cooks spoil the broth? Number of promotional gifts and impact on consumer choice," Journal of Retailing and Consumer Services, Elsevier, vol. 69(C).
    6. Nicole Koschate-Fischer & Katharina Wüllner, 2017. "New developments in behavioral pricing research," Journal of Business Economics, Springer, vol. 87(6), pages 809-875, August.
    7. Mukherjee, Amaradri & Jha, Subhash & Smith, Ronn J., 2017. "Regular Price $299; Pre-order Price $199: Price Promotion for a Pre-ordered Product and the Moderating Role of Temporal Orientation," Journal of Retailing, Elsevier, vol. 93(2), pages 201-211.
    8. Bhattacharyya, Ayan & Jha, Subhash & Guha, Abhijit & Biswas, Abhijit, 2023. "Should firms display the sale price using larger font?," Journal of Retailing, Elsevier, vol. 99(1), pages 17-25.

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