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Purpose – The purpose of this paper is to review the research demonstrating the consumer's erroneous and unfounded perceptions of prices, which can have severe negative consequences on consumer welfare. Design/methodology/approach – This is a review paper of previous research on the...
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The use of advertised reference price promotions, such as “regularly $119.99, sale price $39.99,” is ubiquitous in the marketplace. Thirty years of research supports the conclusion that advertised reference prices (e.g., $119.99) exert an influence on consumers’ responses to offer prices...
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