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Take it or leave it: Experimental evidence on the effect of time-limited offers on consumer behaviour

Author

Listed:
  • Robert Sugden

    (University of East Anglia)

  • Mengjie Wang

    (University of East Anglia)

  • Daniel John Zizzo

    (Newcastle University)

Abstract

Time-limited offers have become one of the most frequently applied pricing practices worldwide. We devise an experiment to explore the influence of time-limited offers on consumers’ behaviour and the mechanisms by which time-limited offers generate this influence. In our experimental tasks, subjects choose among several offers in which one might be time-limited. We vary the time pressure level, the offer value and the occurrence timing of time-limited offers. We control the amount of feedback information that subjects get in various treatments and also subjects’ degree of risk aversion. The experimental results show a strong tendency for subjects to choose time-limited offers. Feedback information has a significant impact on subjects' decisions. Subjects' decision quality shows no improvement with experience. Time-limited offers cause significant consumer welfare losses.

Suggested Citation

  • Robert Sugden & Mengjie Wang & Daniel John Zizzo, 2015. "Take it or leave it: Experimental evidence on the effect of time-limited offers on consumer behaviour," Working Paper series, University of East Anglia, Centre for Behavioural and Experimental Social Science (CBESS) 15-19, School of Economics, University of East Anglia, Norwich, UK..
    • Handle: RePEc:uea:wcbess:15-19
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    3. Daniel John Zizzo & Melanie Parravano & Ryota Nakamura & Suzanna Forwood & Marc Suhrcke, 2021. "The impact of taxation and signposting on diet: an online field study with breakfast cereals and soft drinks," Experimental Economics, Springer;Economic Science Association, vol. 24(4), pages 1294-1324, December.
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    More about this item

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D03 - Microeconomics - - General - - - Behavioral Microeconomics: Underlying Principles
    • D12 - Microeconomics - - Household Behavior - - - Consumer Economics: Empirical Analysis
    • D18 - Microeconomics - - Household Behavior - - - Consumer Protection

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