Framing Effect of Price Promotions on Consumer Choice: Evidence From Brazil

Abstract: The objective of this study is to investigate whether consumers are responsive to price promotion framing effects, i.e., whether displaying a promotional discount as a percentage rather than an absolute monetary value would affect consumer choice. Applying the concept of framing (Tversky and Kahneman (1979, 1981, 1986) and Kahneman (2003a)), in the context of consumer behavior, this study attempts to identify what type of price promotions are more effective for high price and low price products in terms of their framing impacts. Employing survey data collected from a sample of 400 respondents in Sao Paulo, Brazil in 2013, we test the hypotheses that consumers would be indifferent to the promotion type for low price products while the absolute monetary value of a discount would be more effective than percentage in influencing consumer choice for high priced products. Implications for future research and managerial practice are discussed

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Authors: Marina Begalli, Claudio Felisoni de Angelo, Rangamohan V. Eunni