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Distortion of Price Discount Perceptions: The Right Digit Effect

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  • Keith S. Coulter
  • Robin A. Coulter

Abstract

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. (c) 2007 by JOURNAL OF CONSUMER RESEARCH, Inc..

Suggested Citation

  • Keith S. Coulter & Robin A. Coulter, 2007. "Distortion of Price Discount Perceptions: The Right Digit Effect," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 34(2), pages 162-173, June.
    • Handle: RePEc:oup:jconrs:v:34:y:2007:i:2:p:162-173
    DOI: 10.1086/518526
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    Cited by:

    1. Lingjiang Lora Tu & Chris Pullig, 2018. "Penny wise and pound foolish? How thinking style affects price cognition," Marketing Letters, Springer, vol. 29(2), pages 261-273, June.
    2. Feng, Shan & Suri, Rajneesh & Chao, Mike Chen-Ho & Koc, Umit, 2017. "Presenting comparative price promotions vertically or horizontally: Does it matter?," Journal of Business Research, Elsevier, vol. 76(C), pages 209-218.
    3. Elizabeth A. Minton & Richie L. Liu & Christopher T. Lee, 2018. "The 101 calorie mini pack: the interaction between numerical and verbal marketing cues," Marketing Letters, Springer, vol. 29(2), pages 225-239, June.
    4. Grewal, Dhruv & Janakiraman, Ramkumar & Kalyanam, Kirthi & Kannan, P.K. & Ratchford, Brian & Song, Reo & Tolerico, Stephen, 2010. "Strategic Online and Offline Retail Pricing: A Review and Research Agenda," Journal of Interactive Marketing, Elsevier, vol. 24(2), pages 138-154.
    5. Zhu, Zhiwen & Behe, Bridget & Huddleston, Patricia & Sage, Lynnell, 2017. "How do pricing and the representation of price affect consumer evaluation of nursery products? A conjoint analysis," International Food and Agribusiness Management Review, International Food and Agribusiness Management Association, vol. 20(4), March.
    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. Choi, Pilsik & Coulter, Keith S., 2012. "It's Not All Relative: The Effects of Mental and Physical Positioning of Comparative Prices on Absolute versus Relative Discount Assessment," Journal of Retailing, Elsevier, vol. 88(4), pages 512-527.
    8. Dennis D. Fehrenbacher, 2013. "Investigation of the Social Demographic Factors Underpinning Consumers’ Adoption of Information Technology: The Case of Online Banking," LWS Working papers 14, LIS Cross-National Data Center in Luxembourg.
    9. Chien-Huang Lin & Jyh-Wen Wang, 2017. "Distortion of price discount perceptions through the left-digit effect," Marketing Letters, Springer, vol. 28(1), pages 99-112, March.
    10. Iqbal Thonse Hawaldar & Mithun S. Ullal & Felicia Ramona Birau & Cristi Marcel Spulbar, 2019. "Trapping Fake Discounts as Drivers of Real Revenues and Their Impact on Consumer’s Behavior in India: A Case Study," Sustainability, MDPI, vol. 11(17), pages 1-20, August.
    11. Keith S. Coulter, 2013. "Commentary on: “an appraisal of behavioral price research (Part I)”," AMS Review, Springer;Academy of Marketing Science, vol. 3(3), pages 135-140, September.
    12. DelVecchio, Devon & Lakshmanan, Arun & Krishnan, H. Shanker, 2009. "The Effects of Discount Location and Frame on Consumers’ Price Estimates," Journal of Retailing, Elsevier, vol. 85(3), pages 336-346.

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