| Article ID | Journal | Published Year | Pages | File Type |
|---|---|---|---|---|
| 880146 | International Journal of Research in Marketing | 2015 | 4 Pages |
Abstract
•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.
Keywords
Related Topics
Social Sciences and Humanities
Business, Management and Accounting
Marketing
Authors
Mehdi T. Hossain, Ritesh Saini,