Is There a Loyalty-Enhancing Effect of Retroactive Price-Reduction Schemes?
- This paper presents an experiment on the effect of retroactive price-reduction schemes on buyers’ repeated purchase decisions. Such schemes promise buyers a reduced price for all units that are bought in a certain time frame if the total quantity that is purchased passes a given threshold. This study finds a loyalty-enhancing effect of retroactive price-reduction schemes only if the buyers ex-ante expected that entering into the scheme would maximize their monetary gain, but later learn that they should leave the scheme. Furthermore, the effect crucially hinges on the framing of the price reduction.
| Author details: | Lisa Verena BruttelORCiDGND |
|---|---|
| DOI: | https://doi.org/10.1007/s11151-018-9653-9 |
| ISSN: | 0889-938X |
| ISSN: | 1573-7160 |
| Title of parent work (English): | Review of industrial organization |
| Publisher: | Springer |
| Place of publishing: | Dordrecht |
| Publication type: | Article |
| Language: | English |
| Date of first publication: | 2018/08/20 |
| Publication year: | 2018 |
| Release date: | 2021/03/01 |
| Tag: | Buyer behavior; Experiment; Loss aversion; Rebate and discount; Regulation of dominant firms; Risk aversion |
| Volume: | 54 |
| Issue: | 3 |
| Number of pages: | 19 |
| First page: | 575 |
| Last Page: | 593 |
| Funding institution: | German Research Foundation (DFG)German Research Foundation (DFG) [BR 4180/1-1] |
| Organizational units: | Wirtschafts- und Sozialwissenschaftliche Fakultät / Wirtschaftswissenschaften / Fachgruppe Volkswirtschaftslehre |
| DDC classification: | 3 Sozialwissenschaften / 33 Wirtschaft / 330 Wirtschaft |
| Peer review: | Referiert |
| Publishing method: | Open Access / Green Open-Access |
