How Evaluations of Double Discount Are Influenced by Discount Level: The Role of Anchoring and Systematic Computational Error

Abstract

Double discount is an effective format for promoting purchase decisions comparing to single discount (economically equivalent). However, previous studies have overlooked how the discount level applied affects consumers' processing. This study details how consumers evaluate double discount and use different processes according to discount level (low, medium and high), this study extends understanding of computational error and anchoring & Adjustment processes: Low discount leads consumers to anchor on the first piece of information. Medium and high discount instead induces computational error. This paper reveals better ways for managers to present double discounts in markets. Finally, the paper concludes with a present implications, limitations, and directions for future research.