Probabilistic Discounts: When Retailing and Las Vegas Meet

What would you choose: a fixed-discount that offers 10% off your purchase or a probabilistic-discount that offers a 10% chance to get your purchase for free? Based on the observation that people like to gamble we explore the benefits of a new type of discount that combines retailing with gambling: the probabilistic-discount. We find situations in which consumers prefer the probabilistic-discount to the fixed-discount and even spend more money with it. Next, we examine whether the preference is due to the attraction of zero-price, the possibility to avoid the pain of paying, or the excitement of the gamble itself.


Nina Mazar and Dan Ariely (2008) ,"Probabilistic Discounts: When Retailing and Las Vegas Meet", in NA - Advances in Consumer Research Volume 35, eds. Angela Y. Lee and Dilip Soman, Duluth, MN : Association for Consumer Research, Pages: 185-188.


Nina Mazar, Massachusetts Institute of Technology
Dan Ariely, Massachusetts Institute of Technology


NA - Advances in Consumer Research Volume 35 | 2008

Share Proceeding

Featured papers

See More


Time Flies…But Only When the Speed is “Just Right”: How Animation Speed Affects Perceived Waiting Time

Yu Ding, Columbia University, USA
Ellie Kyung, Dartmouth College, USA

Read More


The Impact of Price and Size Comparisons on Consumer Perception and Choice

Jun Yao, Macquarie University, Australia
Harmen Oppewal, Monash University, Australia
Yongfu He, Monash University, Australia

Read More


C2. The Bad Taste of Healthy Food Discounts

Iina Ikonen, Vrije Universiteit Amsterdam
Aylin Aydinli, Vrije Universiteit Amsterdam
Peeter Verlegh, Vrije Universiteit Amsterdam

Read More

Engage with Us

Becoming an Association for Consumer Research member is simple. Membership in ACR is relatively inexpensive, but brings significant benefits to its members.