Free indulgences: Enhanced zero-price effect for hedonic options

• Free promotions are more effective for hedonic (vs. utilitarian) products.
• The effect is evident in both separate and joint evaluation contexts.
• This free-price bounce violates the rational choice axiom.

We find that the relative preference of hedonic products is disproportionately enhanced when they are offered at a free price. This “free price bounce” is more subdued for utilitarian products. This is surprising because rational choice theory posits that relative preference amidst two options – say a hedonic and a utilitarian product – remains intact as long as the price difference between them is constant. We propose and demonstrate that this axiom is violated when a hedonic product is offered for free.