Purpose – This study aims to extend prior studies by examining the mediation effects of sticker shock on the relationship between price discount and buying intention. Sticker shock refers to the discrepancy between a brand’s sale price (SP) and an individual’s internal reference price...

The notion that individuals have an internal reference price against which they compare observed prices is well supported by several psychological theories. Empirically, several papers in the marketing literature, employing scanner panel data, have modeled the impact of reference prices on brand...

The firms in this model set non-binding list prices before competing for buyers by non-cooperatively granting discounts. Each firm has an incentive to set a high list price if, for example, the customers anchor their willingness-to-pay on the list price. However, list price competition occurs if...