How Evaluations of Multiple Percentage Price Changes Are Influenced by Presentation Mode and Percentage Ordering: The Role of Anchoring and Surprise

Abstract

To advance theory, this study details how consumers evaluate multiple percentage price changes (discounts or surcharges). If they consider two discounts—for example, take 18% off the list price, then take an additional 12% off—consumers weight the two percentages to make their evaluations. Cues endogenous to the communication of those percentages also influence the weights applied, according to whether the two percentages appear presented at the same time (simultaneously) or temporally separated (sequentially) and whether the first percentage is larger or smaller. Depending on both the presentation mode and the ordering, consumers use different processes. In addition to providing practical guidance, this article extends understanding of anchoring and adjustment processes; information presented simultaneously leads consumers to anchor on the first piece of information. Sequential presentation instead induces surprise and shifts attention to the latter percentage change, which serves as the anchor in subsequent judgments. In addition to the underlying theory for these effects, this article delineates some boundary conditions and reveals the effects on consumers’ evaluations and choices, with findings from 11 studies.