Journal article
When two plus two is not equal to four: Errors in processing multiple percentage changes
The Journal of consumer research, Vol.34(3), pp.327-340
10/01/2007
DOI: 10.1086/518531
Abstract
When evaluating the net impact of a series of percentage changes, we predict that consumers may employ a "whole number" computational strategy that yields a systematic error in their calculation. We report on three studies conducted to examine this issue. In the first study we identify the computational error and demonstrate its consequences. In a second study, we identify several theoretically driven boundary conditions for the observed phenomenon. Finally we demonstrate in a real-world retail setting that, consistent with our premise, sequential percentage discounts generate more purchasers, sales, revenue, and profit than the economically equivalent single percentage discount.
Details
- Title: Subtitle
- When two plus two is not equal to four: Errors in processing multiple percentage changes
- Creators
- Haipeng Allan Chen - May InstituteAkshay R. Rao - Agricultural Marketing Service
- Resource Type
- Journal article
- Publication Details
- The Journal of consumer research, Vol.34(3), pp.327-340
- Publisher
- Univ Chicago Press
- DOI
- 10.1086/518531
- ISSN
- 0093-5301
- eISSN
- 1537-5277
- Number of pages
- 14
- Language
- English
- Date published
- 10/01/2007
- Academic Unit
- Marketing
- Record Identifier
- 9984618520602771
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