Free indulgences: Enhanced zero-price effect for hedonic options

Mehdi T. Hossain and Ritesh Saini

International Journal of Research in Marketing, 2015, vol. 32, issue 4, 457-460

Abstract: We find that the relative preference of hedonic products is disproportionately enhanced when they are offered at a free price. This “free price bounce” is more subdued for utilitarian products. This is surprising because rational choice theory posits that relative preference amidst two options – say a hedonic and a utilitarian product – remains intact as long as the price difference between them is constant. We propose and demonstrate that this axiom is violated when a hedonic product is offered for free.

Keywords: Behavioral pricing; Sales promotion; Zero price; Hedonic–utilitarian differences; Affective appraisal (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (7)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:ijrema:v:32:y:2015:i:4:p:457-460

DOI: 10.1016/j.ijresmar.2015.10.001

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