Consumer Evaluations of Sale Prices: Role of the Subtraction Principle

Abstract

How exactly does the display location of a sale price relative to the original price affect consumers’ evaluations? Across multiple studies, including field studies with actual choices and studies with nonstudent samples, this article shows that consumer evaluations are a function of the display location of the sale price, but such evaluations are moderated by discount depth. First, presenting the smaller number to the right (vs. left) makes it easier to initiate the subtraction task, a phenomenon the authors refer to as the “subtraction principle.” Second, given that evaluating sale prices inherently involves a subtraction task, locating sale prices to the right (vs. left) of the original price facilitates calculation of discount depth, increasing evaluations for moderate discounts but not for low discounts. These effects are potentially reversed in cases of both very low discounts and exaggerated discounts. The findings in this article offer novel and nonintuitive insights into how sale price display locations and discount depth interact to influence numerical cognitions, processing of sale prices, and subsequent evaluations.