Effects of Reference Prices on Evaluations of Discounts Open Access

Zhang, Canyun (2012)

Permanent URL: https://etd.library.emory.edu/concern/etds/wh246t027?locale=en
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Abstract

Abstract
Effects of Reference Prices on Evaluations of Discounts

The research reported in this paper explores the effects of price framing on consumer
evaluation of discounts using reference prices as the key manipulation. In the context of
a within-subjects experimental design, subjects engaged in a hypothetical shopping task
where they rated five different variables related to discount evaluations. One price frame
that included both original and sale reference prices emerged as especially effective in
enhancing reported levels of savings, though statistically significant differences among
discount frames do not hold across the other measured variables of satisfaction, extent of
savings, and intent of additional or future purchase. Additional analysis suggests that the
roles of internal price estimates and price anchoring are demonstrated to be empirically
plausible and offer explanations of the ways reference prices can in fact influence
perceptions of discounts.

Table of Contents

Table of Contents

I. Introduction.......................................................................................................................1
II. Background.......................................................................................................................3
III. Hypotheses and Approach...................................................................................................8
IV. Methodology....................................................................................................................12
V. Results............................................................................................................................15
VI. Conclusions.....................................................................................................................20
VII. References.....................................................................................................................22
VIII. Appendix.......................................................................................................................24

List of Figures
1. Discount Price Frames Included in the Study............................................................................9
2. Discount Frames Presented at Each Retailer............................................................................13

List of Tables
1. Pre-task Questions - Summary Statistics for Shopping Preferences..............................................24
2. Product Listings at Retailers Q, W, Z, X..................................................................................25
3. Variables Measured and Coding.............................................................................................26
4. Variables and Response Percentage Across Retailers.................................................................27
5. Comparison of Variables - Descriptive Statistics Across Retailers.................................................28
6. Direct Retailer Comparison....................................................................................................29
7. Retailer Discount Ranking.....................................................................................................30
8. Friedman's Test for Differences Among Retailers.......................................................................31

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