Promotion Thresholds: Price Change Insensitivity or Risk Hurdle?
Bibliographic record
Abstract
Abstract Threshold effects in consumer response to price promotions are usually explained as insensitivity to small differences between an observed price and an internal reference price. In this research, we develop an alternative mechanism whereby the threshold effect arises from consumer uncertainty of the normal reference price, rather than from insensitivity to small gains and losses. We compare two variations of this mechanism with the usual insensitivity‐based promotion threshold mechanism. We find that a risk‐hurdle mechanism has the best empirical support, as well as desirable theoretical characteristics. Such a mechanism implies that (a) promotion strategies that assume insensitivity to small changes may be problematic; (b) tactics that influence consumer uncertainty can affect brand choice; and (c) customers' purchase sequence histories have a major impact on deal response. Résumé Dans les réactions des consommateurs aux promotions des ventes, les effets du seuil sont habituellement préséntés comme une insensibilité aux différences minimes entre un prix observé et un prix de référence interne. Dans la présente étude, nous exposons un mécanisme alternatif dans lequel l'effet du seuil est produit par l'incertitude qui s'empare du consommateur devant le prix témoin et non par son insensibilité aux micro gains et pertes. Deux variations de ce mécanisme sont comparées au mécanisme habituel du seuil oscillatoire de promotion basé sur l'indifférence. Les résultats indiquent que le mécanisme à risque présente les meilleures bases empiriques et les caractéristiques théoriques souhaitables. Un tel mécanisme implique: d'un, que les stratégies de promotion qui présument l'insensibilité aux changements mineurs peuvent être problématiques; de deux, que les tactiques qui influencent l'incertitude du consommateur peuvent affecter le choix de la marque; enfin, que les séquences historiques des achats du consommateur ont un impact majeur sur la réaction réservée à une aubaine.
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How this classification was reachedexpand
Full frame distilled prediction
Teacher imitationNot calibrated prevalence, not ground truth. Human validation pending. Learned from the 10,348 direct Codex labels and 10,348 direct Gemma labels. Candidate is the union of thresholded teacher heads; consensus is their intersection. These outputs are machine_predicted_unvalidated and are not human labels or direct frontier model labels.
Codex and Gemma teacher scores by category
| Category | Codex | Gemma |
|---|---|---|
| Metaresearch | 0.004 | 0.001 |
| Meta-epidemiology (narrow) | 0.000 | 0.000 |
| Meta-epidemiology (broad) | 0.000 | 0.000 |
| Bibliometrics | 0.001 | 0.002 |
| Science and technology studies | 0.002 | 0.003 |
| Scholarly communication | 0.001 | 0.004 |
| Open science | 0.001 | 0.000 |
| Research integrity | 0.000 | 0.000 |
| Insufficient payload (model declined to judge) | 0.000 | 0.000 |
Machine scores (provisional)
The two teacher heads of the student model, read on this work. A score orders the frame for review; it never asserts a category, and the validation status ships verbatim with every row.
Baseline scores from an immature model (maturity gate not passed, 7 training rounds). Scores rank; they never assert a category.
score_only:v0-immature-baseline · verbatim from the scoring run: score_only means the number may rank works, and no category label ships from itClassification
machine, unvalidatedMachine predicted; both teacher heads agree on what is shown here.
How this classification was reached, model by model and score by score, is at the end of the page under "How this classification was reached".