Discounts
The predicted main effects of discount on consumers' deal evaluation, buying
intentions and search intentions derive support from Assimilation-Contrast theory. The
consumers might develop a region of price acceptance around their existing IRP
following Assimilation- Contrast Theory. The discounted sale price will be compared
against this range, so the greater the difference between the sale price and the IRP or the
closer the sale price is to the lower continuum of the consumers' mental price range,
greater the value perception generated in their minds. When consumers lack product
knowledge, their perceptions of online pricing will play a significant role. Jensen et al.
(2003) has been shown that consumers expect a low price for a product online compared
to a brick-and-mortar retailer. Consumers also have favorable perceptions about e-tailers'
transparent pricing tactics (Lii and Lee 2005) and their IRP standards move in a favorable
direction for the retailer when there is an ERP present in the deal framed (Hardesty and
Suter 2005). Hence a consumer with a lower price expectation online might have a low
IRP, and thus, the greater the difference between the discounted sale price and the IRP,
more positive would the consumers' evaluation of the deal and buying intentions to the
discounts.