When we make consumer decisions we often ignore the wild discounts and factor them into the price. 50% discounts from a sofa warehouse become the base price we no longer see the ‘full’ price anymore. We prefer getting something for nothing and prospect theory tells us why – even though the economic value may be the same we regard a cash back as a real win. So rather than a $2000 discount on a car a cheque in the post a month later for $2000 is always
Continue reading People prefer cash back or a free gift to wild discounts
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