Percentage discounts, initial price, and bargain hunting: A heuristic-systematic approach to price search behavior.

Consumer decisions concerning price search were investigated using the heuristic-systematic model of social judgment (S. Chaiken, A. Liberman, & A. H. Eagly, 1989 ). Consumers used the size of the percentage discount as a heuristic cue to help decide whether a better price was likely to be available elsewhere. However, as predicted, participants relied on this cue only when the initial base price of the item was low. In contrast, search was continued despite the offer ofa large percentage discount when consumers were shopping for items that were relatively expensive. This finding was attributed to the higher potential costs associated with missing a better price when consumers were shopping for more expensive items. In general, the heuristic-systematic model proved to be a useful way to characterize price search decisions. It was also suggested that these findings might be useful in explaining some conflicting results in the price search literature. Implications for behavioral price theories are also discussed.