Professor Richard Staelin proposes a new pricing system to help consumers make more informed choices
The sellers frame the purchase opportunity as a 'deal,' and this seems to provide the consumer an extra utility, a kind of joy for the realized savings.
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United States consumers are exposed to the ubiquitous presence of permanent deals, whereby the seller posts the ‘original’, higher price and the less expensive, current sales price.
But the deal can be an illusion, says Professor Richard Staelin of Duke University’s Fuqua School of Business. In the paper, “Competition and the Regulation of Fictitious Pricing” published in the Journal of Marketing, Staelin and co-authors write that original prices are often “puffery.”
[This article has been reproduced with permission from Duke University's Fuqua School of Business. This piece originally appeared on Duke Fuqua Insights]