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Take it or leave it: Experimental evidence on the effect of time-limited offers on consumer behaviour

Robert Sugden, Mengjie Wang and Daniel Zizzo
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Mengjie Wang: University of East Anglia

No 15-19, Working Paper series, University of East Anglia, Centre for Behavioural and Experimental Social Science (CBESS) from School of Economics, University of East Anglia, Norwich, UK.

Abstract: Time-limited offers have become one of the most frequently applied pricing practices worldwide. We devise an experiment to explore the influence of time-limited offers on consumers’ behaviour and the mechanisms by which time-limited offers generate this influence. In our experimental tasks, subjects choose among several offers in which one might be time-limited. We vary the time pressure level, the offer value and the occurrence timing of time-limited offers. We control the amount of feedback information that subjects get in various treatments and also subjects’ degree of risk aversion. The experimental results show a strong tendency for subjects to choose time-limited offers. Feedback information has a significant impact on subjects' decisions. Subjects' decision quality shows no improvement with experience. Time-limited offers cause significant consumer welfare losses.

JEL-codes: C91 D03 D12 D18 (search for similar items in EconPapers)
Date: 2015-10-27
New Economics Papers: this item is included in nep-cbe and nep-exp
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Journal Article: Take it or leave it: Experimental evidence on the effect of time-limited offers on consumer behaviour (2019) Downloads
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