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How to Attract Customers by Giving Them the Short End of the Stick


Alison King Lo


Massachusetts 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 Staelin


Duke 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 series


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Date posted: October 31, 2005  

Suggested Citation

Lo, Alison King , Lynch, John G. and Staelin, Richard, How to Attract Customers by Giving Them the Short End of the Stick (October 13, 2005). Available at SSRN: http://ssrn.com/abstract=826785 or http://dx.doi.org/10.2139/ssrn.826785

Contact Information

Alison King Lo (Contact Author)
Massachusetts Institute of Technology (MIT) - Sloan School of Management ( email )
77 Massachusetts Ave.
E62-369
Cambridge, MA 02142
United States
617-519-4088 (Phone)
Duke University - Graduate School ( email )
Durham, NC 27708-0097
United States
John G. Lynch Jr.
University of Colorado-Boulder, Leeds School of Business ( email )
Leeds School of Business
Boulder, CO 80309-0419
United States
919-971-5201 (Phone)
HOME PAGE: http://leeds.colorado.edu/Directory/interior.aspx?id=8054
Richard Staelin
Duke University - Fuqua School of Business ( email )
Box 90120
Durham, NC 27708-0120
United States
919-660-7824 (Phone)
919-660-7990 (Fax)
HOME PAGE: http://www.fuqua.duke.edu/faculty/alpha/rstaelin.h
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