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Rebates, Matches, and Consumer Behavior

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Author Info
Douglas D. Davis (Department of Economics, Virginia Commonwealth University)
Edward L. Millner (Department of Economics, Virginia Commonwealth University)

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Abstract

An experiment conducted to examine the effects of different discount formats on consumer purchases is reported. Participants made a series of purchase decisions for chocolate bars given (1) “rebates” from the listed price, (2) “matching” quantities of chocolates for each bar purchased, and (3) simple price reductions. Contrary to standard theoretical predictions, and consistent with results in the context of charitable contributions by Eckel and Grossman (2003), we find that participants purchase significantly more chocolate bars under a “matching” sales format than under a comparable “rebate” format. Inattention to the net consequences of decisions, as well as some “rebate aversion,” explain the preference for matching discounts.

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Publisher Info
Article provided by Southern Economic Association in its journal Southern Economic Journal.

Volume (Year): 72 (2005)
Issue (Month): 2 (October)
Pages: 410–421
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Handle: RePEc:sej:ancoec:v:72:2:y:2005:p:410-421

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Web page: http://www.southerneconomic.org/
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Find related papers by JEL classification:
C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
D11 - Microeconomics - - Household Behavior - - - Consumer Economics: Theory
D46 - Microeconomics - - Market Structure and Pricing - - - Value Theory

References listed on IDEAS
Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.:

  1. James Andreoni & Lise Vesterlund, 2001. "Which Is The Fair Sex? Gender Differences In Altruism," The Quarterly Journal of Economics, MIT Press, vol. 116(1), pages 293-312, February. [Downloadable!] (restricted)
    Other versions:
  2. Harrison, Glen W. & Ronald M. Harstad & E. Elisabet Rutström, 1995. "Experimental Methods and Elicitation of Values," Discussion Paper Serie B 349, University of Bonn, Germany.
    Other versions:
  3. Douglas Davis & Edward Millner & Robert Reilly, 2005. "Subsidy Schemes and Charitable Contributions: A Closer Look," Experimental Economics, Springer, vol. 8(2), pages 85-106, June. [Downloadable!] (restricted)
  4. Philippe Février & Michael Visser, 2004. "A Study of Consumer Behavior Using Laboratory Data," Experimental Economics, Springer, vol. 7(1), pages 93-114, February. [Downloadable!] (restricted)
    Other versions:
  5. John H. Kagel & Raymond C. Battalio & Leonard Green, 1995. "Economic Choice Theory. An Experimental Analysis of Animal Behavior," Framed Field Experiments 0034, The Field Experiments Website.
  6. James Andreoni & John Miller, 2002. "Giving According to GARP: An Experimental Test of the Consistency of Preferences for Altruism," Econometrica, Econometric Society, vol. 70(2), pages 737-753, March. [Downloadable!] (restricted)
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Cited by:
(explanations, Please report citation or reference errors to , or , if you are the registered author of the cited work, log in to your RePEc Author Service profile, click on "citations" and make appropriate adjustments.)

  1. Catherine C. Eckel & Philip J. Grossman, 2006. "Subsidizing charitable contributions: a natural field experiment comparing matching and rebate subsidies," Working Papers 2008-08 Classification-C9, Saint Cloud State University, Department of Economics, revised Dec 2007. [Downloadable!]
    Other versions:
  2. Saez, Emmanuel, 2007. "Details Matter: The Impact of Presentation and Information on the Take-up of Financial Incentives for Retirement Saving," CEPR Discussion Papers 6386, C.E.P.R. Discussion Papers. [Downloadable!] (restricted)
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This page was last updated on 2009-11-6.

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