Deep Discount Or Free? the Effects of Price Promotion on Willingness to Pay

Mauricio Palmeira, Monash University, Australia
Joydeep Srivastava, University of Maryland, USA
We contrast promotions in which a product is offered for free to promotions in which it is offered for a low price. Drawing on anchoring and adjustment, we show in two studies that a low price reduces reservation prices more than a zero price.
[ to cite ]:
Mauricio Palmeira and Joydeep Srivastava (2011) ,"Deep Discount Or Free? the Effects of Price Promotion on Willingness to Pay", in NA - Advances in Consumer Research Volume 38, eds. Darren W. Dahl, Gita V. Johar, and Stijn M.J. van Osselaer, Duluth, MN : Association for Consumer Research.