Rebates, Matches, and Consumer Behavior
AbstractAn 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 (a) “rebates” from the listed price, (b) “matching” quantities of chocolates for each bar purchased, and (c) simple price reductions. Contrary to standard theoretical predictions, and consistent 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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Bibliographic InfoPaper provided by VCU School of Business, Department of Economics in its series Working Papers with number 0401.
Length: 21 pages
Date of creation: Sep 2004
Date of revision:
Consumer Behavior; Experiment; Discount Formats;
Other versions of this item:
- 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
This paper has been announced in the following NEP Reports:
- NEP-ALL-2006-02-26 (All new papers)
- NEP-EXP-2006-02-26 (Experimental Economics)
- NEP-MIC-2006-02-26 (Microeconomics)
- NEP-MKT-2006-02-26 (Marketing)
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