Crossing the Efficiency Frontier: A Framework for Understanding Consumers’ Responses to Bargains

Aner Sela

Chapter 7 in New Directions in Behavioral Pricing, 2024, pp 167-181 from World Scientific Publishing Co. Pte. Ltd.

Abstract: Consumers frequently face potential opportunities, such as products on sale, loyalty programs, rebate offers, and other promotions. Opportunities are a powerful driver of action, and consumers often spend much time and effort to obtain them — sometimes more than seems justifiable by the magnitude of the saving (Blattberg and Neslin 1989; Darke and Dahl 2003; Schindler 1989; Thaler 1985). However, the mere fact that a marketing offer is presented as a potential bargain is often not enough to make consumers see the offer as representing above-normal value for them. In fact, people are usually quite selective in pursuing purported bargains and often forgo them regardless of their resource limitations. Despite the allure of apparent bargains, consumers’ perceptions of idiosyncratic value remain elusive…

Keywords: New Currencies; Loyalty Program Miles as a Virtual Currency; Uncertainty in Value; Choice of Payment Mode; Loyalty Program Management; Affective Price Evaluations; Pain of Paying; Metacognitive Experience In Price Evaluation; The Ease-of-Recall Pricing Effect; The Ease-of-Computation Effect; Hedonic Price Evaluations; Price Fairness; Dual Entitlement; Communicating Price Changes; Communicating Price Differences; Internal Reference Price; Gain–Loss Asymmetry; Price Thresholds; Processing Price Information; Framing Price Changes; Framing Price Differences; Buyers' Purchase Goals; Round Versus Sharp (Odd) Prices; Price Promotion Information Processing; Ease of Computing Price Differences; Size of Right Digit Endings; Absolute Versus Relative Price Differences; Communicating Price Differences; Effects on Quality Inferences And Internal Reference Prices; Post-Promotion Price Expectations; Perceived Fairness of Price Promotions; Pay-What-You-Want (PWYW); Social Preferences; Models of Finitely Repeated Games with Incomplete Information; Signaling; Self-Signaling; Social Signaling; Social Preferences; Partitioned Pricing; Bargains; Efficiency Frontier (search for similar items in EconPapers)
JEL-codes: D4 L11 M31 (search for similar items in EconPapers)
Date: 2024
References: Add references at CitEc
Citations:

Downloads: (external link)
https://www.worldscientific.com/doi/pdf/10.1142/9789811292231_0007 (application/pdf)
https://www.worldscientific.com/doi/abs/10.1142/9789811292231_0007 (text/html)
Ebook Access is available upon purchase.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:wsi:wschap:9789811292231_0007

Ordering information: This item can be ordered from

Access Statistics for this chapter

More chapters in World Scientific Book Chapters from World Scientific Publishing Co. Pte. Ltd.
Bibliographic data for series maintained by Tai Tone Lim ().