Discounts and Consumer Search Behavior: The Role of Framing

Ralph-C Bayer () and Changxia Ke
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Changxia Ke: Max Planck Institute

No 2010-21, School of Economics and Public Policy Working Papers from University of Adelaide, School of Economics and Public Policy

Abstract: We implement a simple two-shop search model in the laboratory with the aim to investigate if consumers behave differently in equivalent situations, where prices are displayed either as net prices or as gross prices with discounts. We compare treatments, where we either depict the known price of the first shop or the initially uncertain price of the second shop as a gross price with a discount, with treatments without discounts. We ind that subjects search less in both treatments with discounts. Hence, we conclude that retailers can use this framing effect in order to reduce the competitiveness in their market, since dehttps://media.adelaide.edu.au/economics/pressure.

Keywords: Consumer Search; Price Framing; Price discounts; Competition (search for similar items in EconPapers)
JEL-codes: C91 D82 D83 L13 (search for similar items in EconPapers)
Pages: 31 pages
Date: 2010-10
New Economics Papers: this item is included in nep-cbe and nep-exp
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Related works:
Journal Article: Discounts and consumer search behavior: The role of framing (2013)
Working Paper: Discounts and Consumer Search Behavior: The Role of Framing (2011)
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