Discounts and consumer search behavior: The role of framing

• Published in: Journal of economic psychology Vol. 39; pp. 215 - 224
• Main Authors: Bayer, Ralph-C., Ke, Changxia
• Format: Journal Article
• Language: English
• Published: Amsterdam Elsevier B.V 01.12.2013; Elsevier; Elsevier Sequoia S.A
• Subjects: Advertising. Marketing. Consume behavior; Applied psychology; Biological and medical sciences; Competition; Consumer behavior; Consumer search; Consumers; Decision analysis; Decision making; Discounts; Economic behaviour; Framing; Fundamental and applied biological sciences. Psychology; Impact analysis; Price discounts; Price framing; Prices; Psychology. Psychoanalysis. Psychiatry; Psychology. Psychophysiology; Studies; Competition; Consumer search; C91; Price framing; D83; Price discounts; Human; Experimental study; Searching behavior; Consumer behavior; Consumer; Price; Framing effect
• ISSN: 0167-4870; 1872-7719
• DOI: 10.1016/j.joep.2013.08.003

•We study the pure framing effect of price discounts on consumer search behavior.•We implement a two-shop search model in the laboratory.•Subjects search less in discount frames than equivalent frames without discount.•The distorted search behavior may have anti-competitive consequences. This paper studies the pure framing effect of price discounts, focusing on its impact on consumer search behavior. In a simple two-shop search experiment, we compare search behavior in base treatments (where both shops post net prices without discounts) to discount treatments (where either the first shop or the second shop posts gross prices with separate discount offers, keeping the net prices constant). Although the objective search problems are identical across treatments, subjects search less in discount frames, irrespective where the discount is offered. There is evidence showing that subjects only base their decisions on salient characteristics of the situation rather than on the objective price information.