Mauricio Palmeira

Who they are

Biography beyond the cited work is not recorded, by rule. The publisher record for the 2013 paper lists a department of marketing and no institution, so no affiliation is stated here.

What can be said is limited to the work. Palmeira has published at least two papers in the Journal of Consumer Research on how people respond to zero. The 2011 paper is a sole-authored study and the 2013 paper is a two-author study, and both sit in the line of research that followed the 2007 paper on the zero price effect by Kristina Shampanier, Nina Mazar and Dan Ariely.

Key papers

Palmeira, M. M., & Srivastava, J. (2013). "Free Offer Is Not a Cheap Product: A Selective Accessibility Account on the Valuation of Free Offers." Journal of Consumer Research, 40(4), 644-656. First author. Abstract read.

Palmeira, M. M. (2011). "The Zero-Comparison Effect." Journal of Consumer Research, 38(1), 16-26. Sole author. Cited by title only; no abstract was available and the paper was not read.

Key ideas

The 2013 paper starts from a common promotion. Retailers, and firms launching new products, offer a product for free or at a low discounted price along with a required purchase. The question is what the product is worth to the customer once the promotion is withdrawn.

The finding is that willingness to pay for the product after the promotion is retracted is higher when it was offered for free than when it was offered at a low, discounted price. The reasoning in the abstract is that the price of a product on promotion is used as a natural anchor for estimating its value. When the product is offered for free, consumers are less likely to consider the value of the product and are influenced by other anchors, such as the price of the focal purchase. The authors set this against some earlier findings and conclude that a free offer does not devalue the product at all and, at a minimum, devalues it less than a low discounted price would.

That is a useful corrective to a common assumption in marketing, that giving a product away teaches customers it is worth nothing. The result says something more careful. The size of the discount does the teaching, and when the discount is complete, there is no number to learn from.

The account is called selective accessibility, and it is the name given to the mechanism, the claim that which information is accessible when a judgement is made shapes the judgement. A low price is accessible and anchors value. A zero price is not informative about value, so the judgement draws on whatever else is accessible.

A reader should keep the scope in view. The finding concerns valuation after a promotion, measured as willingness to pay. It does not say that free offers earn more than discounts, and the abstract does not report on how long the effect lasts. It also differs in kind from the 2007 finding that people choose the free option more often. That finding is about the choice at the moment of the offer. This one is about the value placed on the product afterwards. The two can both hold, and they describe different parts of what a free offer does.

The 2011 sole-authored paper's title, "The Zero-Comparison Effect", points to a related question, how a zero is compared with other prices. Its content is not described here because it was not read.

For the vault's purposes, the 2013 paper is best placed with the anchoring literature, because its mechanism is an anchoring one, and beside the 2006 study by Sucharita Chandran and Vicki Morwitz, which found that free promotions are more salient than equivalent monetary discounts. Salience and anchoring are two sides of the same observation, that a free offer changes where attention goes.

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