This study aims to explore the underlying mechanism and boundary conditions of consumer’s preference on a multiple-percentage discount over an economically equivalent single discount.
The authors tested their predictions using two large-scale online experiments accompanied by a fully controlled laboratory experiment.
This study shows that the preference for a multiple-percentage discounts over an economically equivalent single-percentage discount is because consumers directly add the raw values of multiple-percentage discounts. The preference is less prominent if the percentage discounts are presented using round (vs non-round) numbers and is strengthened by experiential-thinking style.
This study examined consumer preferences between a single-percentage discount and an economic equivalent multiple-percentage discount. A promising research topic is exploring consumer preferences between multiple-percentage discounts.
Understanding how different presentation formats of the same price discount can lead to different evaluations enables managers and marketers to ensure a more effective promotional strategy.
This study extends literature on price-based promotions by demonstrating how consumers’ preferences for multiple discounts can be strengthened or weakened.
