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Asymmetric post-promotion effects

Authors Wathieu, Luc
Bronnenberg, Bart J.
Issue Date 1997-05
Summary What is the impact of temporary discounts on a consumer's subsequent preferences among alternatives at regular price? It is proposed here that post-promotion effects are asymmetric: expensive brands are hurt, and cheaper brands are helped, by their own promotions as well as by their competitors' promotions. This conditional result sheds new light on the recent inconclusive debates about the longer run effect of promotions. From a more theoretical viewpoint, it is shown that the behavioral decision theoretic concepts known as (1) loss aversion, (2) trade-off contrast and (3) status quo bias do not yield equivalent implications in terms of post-promotion effects. The theory and evidence reported here helps to identify clearer boundaries between those concepts.
Language English
Format Working paper
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