Publications [#352394] of Dan Ariely

Journal Articles

1. Lee, CY; Morewedge, CK; Hochman, G; Ariely, D, Small probabilistic discounts stimulate spending: Pain of paying in price promotions, Journal of the Association for Consumer Research, vol. 4 no. 2 (April, 2019), pp. 160-171 [doi]
   (last updated on 2024/04/19)

   Abstract:
   We find that small probabilistic price promotions effectively stimulate demand, even more so than comparable fixed price promotions (e.g., “1% chance it’s free” vs. “1% off,” respectively), because they more effectively reduce the pain of paying. In three field experiments at a grocer, we exogenously and endogenously manipulated the salience of pain of paying via elicitation timing (e.g., at entrance or checkout) and payment method (i.e., cash/debit cards or credit cards). This modulated the attractiveness of probabilistic discounts and their ability to stimulate spending. Shoppers paying with cash or debit cards, for example, spent 54% more if they received a 1% probabilistic discount than a 1% fixed discount (experiment 2). A fourth experiment showed that consumers’ sensitivity to pain of paying modulates the greater comparative efficacy of small probabilistic than fixed discounts. More broadly, the results elucidate a novel affective route through which price promotions stimulate demand-pain of paying.