Experience with changing price levels inside stores has
been traditionally identified as a primary information source
for consumers to update internal reference points [8] or the
expected cost of alternative purchasing options [9]. The
“adaptive expectation” approach proposed in Nerlove [10]
was one of the first to model how consumers update expectations.
Consumers may follow different routes for updating
expectations. As we shall explain later, fluctuations in prices
may have different impacts on different consumers in
updating their expectations; this is moderated by the amount
of cognitive resources they invest during the shopping
process.