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How to Attract Customers by Giving Them the Short End of the StickAlison King LoMassachusetts Institute of Technology (MIT) - Sloan School of Management; Duke University - Graduate School John G. Lynch Jr.University of Colorado-Boulder, Leeds School of Business Richard StaelinDuke University - Fuqua School of Business October 13, 2005 Abstract: Several influential streams of research in marketing, psychology, and economics conclude that, holding constant the offer a seller makes to a buyer, the buyer will be repelled by learning that some other group of buyers is getting a better price for the same benefits or receiving more benefits for the same price. Past work has attributed this repulsion to perceptions that the offer is inequitable, fits others better than oneself, or that the offer suggests that the core product is of low value. In six experiments, we show conditions under which exactly the opposite can occur: consumers judge the same offer to be more attractive when a seller offers a better price or more benefits to another group rather than treating everyone equally.
Number of Pages in PDF File: 44 Keywords: fairness, targeted promotion, consumer behavior, product quality JEL Classification: C91, D63, D82, L15, M31 working papers seriesDate posted: October 31, 2005Suggested CitationContact Information
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