Free Offer ≠ Cheap Product: A Selective Accessibility Account on the Valuation of Free Offers
Mauricio Palmeira and Joydeep Srivastava found that willingness to pay for a product after a promotion is withdrawn is higher when it was offered for free than when it was offered at a low discounted price. They explain this through selective accessibility: a low price anchors the estimate of value, while for a free offer people are less likely to consider the product's value and are influenced by other anchors, such as the price of the focal purchase. A free offer does not devalue the product, and devalues it less than a low discounted price would.
Mauricio Palmeira and Joydeep Srivastava found that willingness to pay for a product after a promotion is withdrawn is higher when it was offered for free than when it was offered at a low discounted price. They explain this through selective accessibility: a low price anchors the estimate of value, while for a free offer people are less likely to consider the product's value and are influenced by other anchors, such as the price of the focal purchase. A free offer does not devalue the product, and devalues it less than a low discounted price would.
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Palmeira, M. M., & Srivastava, J. (2013). Free Offer ≠ Cheap Product: A Selective Accessibility Account on the Valuation of Free Offers. Journal of Consumer Research, 40(4), 644-656. doi:10.1086/671565