Effectiveness of Exaggerated Advertised Reference Prices: The Role of Decision Time Pressure

Balaji C. Krishnan, Sujay Dutta and Subhash Jha

Journal of Retailing, 2013, vol. 89, issue 1, 105-113

Abstract: Despite the prevalence of exaggerated advertised reference prices (ARPs) in retail ads and the potential for consumer vulnerability to false reference prices, research identifying boundary conditions to the effectiveness of exaggerated ARPs is scarce. We demonstrate that exaggerated ARPs are much more effective in favorably influencing consumers’ perceptions of retail offers when they feel time pressure while evaluating such offers. Further, although past research indicates that high promotion frequency weakens the effectiveness of exaggerated ARPs, we show that this is not observed when time pressure is present. We discuss the implications of this research and provide directions for future research.

Keywords: Retail pricing; Reference price advertisements; Time pressure; Promotion frequency; Exaggerated reference price; Experimental design; 3 studies (search for similar items in EconPapers)
Date: 2013
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Citations: View citations in EconPapers (8)

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Persistent link: https://EconPapers.repec.org/RePEc:eee:jouret:v:89:y:2013:i:1:p:105-113

DOI: 10.1016/j.jretai.2012.11.001

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