Releasing the Regret Lock: Consumer Response to New Alternatives after a Sale

Abstract

This research examines how consumers behave after they miss a sale and subsequently face a smaller sale for the same or different product. According to the proposed theory, a two-way interaction is predicted in which adding another similar alternative to the choice set leads to higher choice deferral without prior sale information but lower choice deferral with information about missing a larger sale on one of the alternatives. In addition, the new alternative in the choice set becomes more attractive and captures most of the market share. The results from three lab experiments and one field experiment confirm the hypotheses and the proposed mechanism. The article concludes with a discussion of the theoretical and managerial implications of the findings.