How Do Shoppers Respond to Noisy Signals on Price Changes? Evidence from a Field Experiment in Online Supermarket Shopping*

Kfir Eliaz, Orli Oren-Kolbinger, Sarit Weisburd*

*Corresponding author for this work

Research output: Contribution to journalArticlepeer-review

Abstract

What is the effect on the demand for both discounted and nondiscounted products, when promotional material informs shoppers that some product categories feature discounts? We address this question by conducting a field experiment on a website for online grocery shopping. We find that shoppers who had purchased in a certain food category prior to the experiment responded to noisy promotional information by purchasing items in the discounted category that they had already purchased in the past, regardless of whether the item purchased was currently discounted. Our results suggest that coarse information on discounts increases both consumer spending and seller revenue.

Original languageAmerican English
JournalJournal of Industrial Economics
DOIs
StateAccepted/In press - 2023

Bibliographical note

Publisher Copyright:
© 2023 The Authors. The Journal of Industrial Economics published by The Editorial Board of The Journal of Industrial Economics and John Wiley & Sons Ltd.

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