Financial Incentives and Consumer Product Choices

Marco Bertini, London Business School, UK
Utpal (Paul) Dholakia, Rice University, USA
We examine the role of common promotional instruments, including targeted promotions, coupons, quantity discounts, referral discounts, and bundling, in arousing reactance and degrading consumer choice within product assortments, positing that they induce more price-sensitive, cautious decision-making among a firm’s existing (but not new) customers. To assess this proposition, we conducted both laboratory experiments and field studies across a total of seven different purchase contexts and six different types of concessions. The results of these varied tests provide convergent evidence for our proposition and provide new insights into the role of reactance in customer decision making.
[ to cite ]:
Marco Bertini and Utpal (Paul) Dholakia (2010) ,"Financial Incentives and Consumer Product Choices", in NA - Advances in Consumer Research Volume 37, eds. Margaret C. Campbell, Jeff Inman, and Rik Pieters, Duluth, MN : Association for Consumer Research, Pages: 53-56 .