There Is No Such Thing As a Free Lunch: the Negative Effect of Zero Price on Consumer Demand

Fengyan Cai, Shanghai Jiao Tong University, China
Xiaomeng Fan, Northwestern University, USA
Both intuition and empirical evidences indicate that people like cheap products and free products are particularly attractive. But we showed a backfiring effect of zero price on consumer demand and identified a moderator that could drive the effect of zero price on demand into either positive or negative direction.
[ to cite ]:
Fengyan Cai and Xiaomeng Fan (2017) ,"There Is No Such Thing As a Free Lunch: the Negative Effect of Zero Price on Consumer Demand", in NA - Advances in Consumer Research Volume 45, eds. Ayelet Gneezy, Vladas Griskevicius, and Patti Williams, Duluth, MN : Association for Consumer Research, Pages: 1065-1065.