Journal of Retailing 81 (1, 2005) 35–47

Effects of pricing and promotion on consumer perceptions:

it depends on how you frame it
Peter R. Darke a,∗ , Cindy M.Y. Chung b,1
a Marketing Division, Sauder School of Business, University of British Columbia, 2053 Main Mall, Vancouver, BC, Canada V6T 1Z2
b Marketing and International Business Division, Nanyang Business School, Nanyang Technological University,

Nanyang Avenue, Singapore 639798, Singapore

Abstract

This research examined the extent to which different promotional frames increased perceptions of deal value. Price discounts dominate the
sales promotions employed by marketers. The framing literature suggests discounts have robust positive effects on consumer perceptions of
deal value. However, the current research showed that negative quality inferences moderated discount framing effects and undermined deal
value, particularly when no assurance of product quality was provided. Every-day-low-price offers were also vulnerable to negative quality
inferences, while free gift frames maintained quality perceptions and increased deal value. Product trial acted to further magnify promotional
framing effects, according to a confirmation bias. These findings were consistent with an attribute framing mechanism.
© 2005 by New York University. Published by Elsevier Inc.

Keywords: Pricing; Promotion; Consumer perception

Price discounts are by far the most common form of sales
promotion employed by marketers, and their use has steadily
increased in recent years. For instance, the number of price
reductions offered in department stores grew from six per-
cent of total sales to nineteen percent between 1963 and
1986 (Blattberg & Neslin 1991), and the number of coupons
distributed by manufacturers more than quadrupled between
1976 and 2000 (Promotion Marketing Association Coupon
Council 2001). In addition, numerous empirical studies have
found that discount prices lead to a reliable increase in per-
ceptions of value (Compeau & Grewal 1998).
However, price discounts have also received their share
of criticism (e.g., Ortmeyer, Quelch, & Salmon 1991). Some
critics suggest consumers are skeptical of sale prices, in that
they view the lower selling price, rather than the initial price,
as the “true price” of the item. Discounts may also undermine
perceptions of product quality. This has led at least some ex-
perts to advocate alternative strategies. For instance, every-
∗
Corresponding author. Tel.: +1 604 822 8362.
E-mail addresses: peter.darke@sauder.ubc.ca (P.R. Darke),
acchung@ntu.edu.sg (C.M.Y. Chung).
1 Tel.: +65 6790 4980.
day-low-price claims (EDLPs) are said to provide a straight-
forward means of conveying value to consumers, which is
less likely to undermine product quality (Bond 1997; Liesse
1992; Morgan 1994; Ortmeyer et al. 1991). Another alter-
native is to offer premiums or free gifts. Anecdotal evidence
suggests consumers often view such offers as highly valuable
(e.g., Lobb 1997).
Despite a good deal of speculation, very little empirical
research has directly examined the advantages and disadvan-
tages of discounts compared to other promotional strategies
(see Hoch, Dreze, & Purk 1994). This is surprising given
that EDLPs and premiums serve as common alternatives to
discounts, and managers often have the option of choosing
between these strategies when deciding how to promote their
products. The current studies addressed the need for research
in this area by identifying conditions under which discounts
have limited effects on deal value, and examining whether
EDLP or free gift offers provide any advantages over dis-
counts under such conditions. In particular, we show the nor-
mally robust effects of discount framing on perceptions of
value can be moderated by negative quality inferences. This
idea is developed by comparing the discount framing liter-
ature to other research suggesting that discounts can have

0022-4359/$ – see front matter © 2005 by New York University. Published by Elsevier Inc.
doi:10.1016/j.jretai.2005.01.002
36 P.R. Darke, C.M.Y. Chung / Journal of Retailing 81 (1, 2005) 35–47
negative effects on perceptions of quality. We also examine
whether EDLPs or free gifts are any less sensitive to negative
quality inferences. The results show that unrelated free gift
offers, but not EDLPs, maintained quality perceptions and
communicated greater deal value. Finally, attribute framing
(Levin, Schneider, & Gaeth 1998) was identified as the psy-
chological mechanism for these promotion effects.
Discounts, framing and transaction utility theory
A large number of studies show that discount offers can
have positive effects on consumer perceptions in terms of the
value associated with the offer (e.g., Darke & Dahl 2003;
Inman, Peter, Anil, & Raghubir 1997; Urbany, Bearden, &
Weilbaker 1988). Transaction utility theory (TUT; Thaler
1985) suggests that two different types of value are derived
from such purchase transactions. Discounts provide acqui-
sition utility, or standard economic value, by lowering the
amount paid to receive the same product benefits. Discounts
also provide transaction utility, which relates to the perceived
merits of the deal and goes beyond the economic outcomes.
The mental calculus for evaluating transaction utility involves
comparing the current price offer (p) to an internal standard
for the expected price of the item (p* ), where transaction
utility increases if the price offer meets or falls below the ex-
pected reference price. Discounts increase transaction utility
by raising consumer expectations of the usual price of the
item (i.e., by raising estimates of p* ).
A great deal of research has examined discounts using
TUT’s framing perspective. In the majority of these studies
(e.g., Lichtenstein & Bearden 1989; Urbany et al. 1988), dis-
count size is manipulated by holding the selling price of the
item constant, while varying the discount frame using the
initial or suggested retail price (e.g., $39.99 vs. “was $49.99
. . . now $39.99”). Manipulating the discount in this fashion
varies the transaction utility associated with the deal, while
holding acquisition utility constant (i.e., the same amount
of money is paid for the same product regardless of whether
the price is discounted or a regular price). A meta-analysis by
Compeau and Grewal (1998) found that framing prices in this
way reliably increased estimates of the reference price and
led to more positive evaluations of the deal (see also Krishna,
Briesch, Lehmann, & Yuan 2002). However, Compeau and
Grewal (1998) emphasized a need to identify important mod-
erators for these discount framing effects, and suggested neg-
ative quality inferences are particularly likely to moderate
discount framing effects.
Negative quality inferences and discounts
A number of studies show discounts can also lead to
more negative consumer perceptions by undermining the per-
ceived quality of the discounted item (Raghubir & Corfman
1999; Scott & Yalch 1980; Tybout & Scott 1983), and lower-
ing the probability of future purchases (Dodson, Tybout, &
Sternthal 1978; Doob, Carlsmith, Freedman, Landauer, &
Saleng 1969). None of these studies were included in the
Compeau and Grewal (1998) meta-analysis of discount fram-
ing, presumably because they did not meet the criteria for in-
clusion. Self-perception theory (Scott & Tybout 1979; Scott
& Yalch 1980) offers one explanation for the negative effects
of discounts. It suggests consumers attribute their purchase
to the incentive provided by the discount itself (e.g., “I chose
it because it was on sale”), rather than to the inherent quality
of the product (e.g., “I chose it because it’s a good product”),
with the net result that quality perceptions are lower when
items are discounted.
The current investigation adopted a slightly different ex-
planation for these negative discount effects, which is that
discount prices produce negative price-quality inferences
(Garbor & Granger 1961; Raghubir & Corfman 1999). Ac-
cording to this view, consumers use the lower selling price
to infer the quality of the product is also lower. The well-
known price-quality literature shows that price levels have
reliable effects on perceptions of quality (Rao & Monroe
1989). Price-quality inferences are most likely when it is dif-
ficult to directly judge the quality of the product (Jacoby,
Olson, & Haddock 1971), or when consumers are unfamil-
iar with the brand (Raju 1977; Wheatley & Chiu 1977) or
retailer (Stafford & Enis 1969). These findings suggest that
consumers tend to use price as an indication of quality unless
no additional assurances of quality are provided. Interest-
ingly, marketers frequently offer discounts in precisely the
situations where price-quality inferences are most likely to
occur. Discounts are commonly used to sell generic goods,
to induce consumers to try new products, or to switch to less
familiar brands and retailers (Blattberg & Neslin 1991). Un-
der these circumstances, doubt about the quality of promoted
items is likely to exist, and consumers are therefore more
likely to make negative price-quality inferences.
Price-quality inferences moderate positive discount
effects
Despite a substantial amount of research concerning pos-
itive discount framing effects and research that examines
consumers’ propensity to make price-quality inferences, rel-
atively little attention has been paid to the implications
these two research literatures have for each other. Following
Compeau and Grewal (1998), we suggest that negative price-
quality inferences are likely to moderate positive discount
framing effects on deal value. This can occur in two ways.
The most obvious possibility is that negative quality infer-
ences will undermine the perceived acquisition utility of the
deal. Lowering a price using a discount offer not only lowers
the cost to the consumer, but also threatens to lower percep-
tions of product quality through negative price-quality infer-
ences relating to the lower selling price. Such price-quality
inferences should attenuate the effects of the lower cost on
 P.R. Darke, C.M.Y. Chung / Journal of Retailing 81 (1, 2005) 35–47
perceptions of value. Rather than thinking they are getting
the same quality item at a lower price, consumers may use
the lower discount price to infer they are actually getting a
lower quality item at a lower price.
It is also possible for negative quality inferences to under-
mine the value of the discount via transaction utility. TUT
proposed that transaction utility is a function of the expected
price (p* ) relative to the selling price (p). However, if con-
sumers infer that product quality is consistent with the lower
discount price, the internal reference price for this product
might also be adjusted to match the lower perceptions of
quality (p* would approach p), and thereby undermine trans-
action utility. This is consistent with previous criticisms that
discounts are ineffective because consumers assume the sale
price is the “true” price of the item (Ortmeyer et al. 1991).
We have seen there is a great deal of evidence that discount
frames tend to produce a reliable increase in perceptions of
deal value. This conclusion seems to contradict the sugges-
tion that discounts can also induce negative quality inferences
that threaten to undermine perceptions of deal value. How-
ever, careful examination of the procedures used in studies of
discount framing suggests that some of the procedures may
have artificially limited the extent to which consumers were
likely to make negative price-quality inferences. For instance,
many discount framing studies provide consumers with an
additional assurance of quality by using name brand prod-
ucts (e.g., Darke & Freedman 1993, 1995; Grewal, Monroe,
& Krishnan 1998; Urbany et al. 1988), or by including direct
instructions that assure consumers of the product’s quality
(e.g., Darke & Freedman 1993, 1995; Urbany et al. 1988).
As mentioned, such assurances would be expected to limit
price-quality inferences.
In addition, and more importantly, the manner in which
discounts are typically manipulated in framing studies makes
it virtually impossible for negative price-quality inferences
to occur. As mentioned, studies that produce positive fram-
ing effects tend to manipulate discount size by varying the
initial price of the item, while holding the selling price con-
stant (e.g. comparing an item sold at $39.99 with an item
sold at the same price but said to originally cost $59.99).
In this case, getting a discount does not result in a lower
selling price, which means there is simply no way that neg-
ative price-quality inferences could undermine perceptions
of value. However, under normal circumstances, the selling
price is lowered when consumers receive a discount, which
means there is greater possibility for negative price-quality
inferences to undermine deal value. In fact, all the studies that
find discounts lead to lower quality perceptions have manip-
ulated discounts by lowering the selling price, rather than
by raising the initial price (e.g., Raghubir & Corfman 1999;
Scott & Yalch 1980).
Overall, we predicted that negative quality inferences
would limit the extent to which discount frames increase deal
value when the discount is created by lowering the selling
price rather than by raising the initial price, and when no
additional assurances of product quality are provided. If so,
37
this would suggest negative quality inferences are capable of
moderating positive discount framing.
Attribute framing
The process by which price-quality inferences are pre-
dicted to influence judgments of discounted products is best
described in terms of an attribute framing mechanism (Levin
et al. 1998). This form of framing is distinct from the gain/loss
framing that underlies mental accounting, and TUT. Attribute
framing occurs when superficial variations in the description
of a single aspect of the offer leads consumers to make either
additional positive or negative associations about the product,
which then influence the overall valence of further product
evaluations. For instance, a study by Levin and Gaeth (1988)
showed that framing the description of ground beef as 75
percent lean rather than 25 percent fat led to more favorable
evaluations of the product, despite the fact that the quality
of the product was identical in both cases. The associative
process is analogous to priming effects on price judgment
(e.g., Herr 1989), where subtle variations in the information
presented cause positive or negative associations to become
more salient when making evaluative judgments. In the cur-
rent context, different sales promotions are assumed to focus
consumers on different prices, which alter the associations
made for the quality of the product in a direction consistent
with the most salient price.
Furthermore, attribute framing may be aided by a con-
firmatory bias, where an initial shift in expectations due to
priming eventually produces much larger shifts in evaluation
through the operation of cognitive biases in processing fur-
ther evidence relevant to product quality (Levin et al. 1998).
The effects of confirmatory biases are well known in other
areas of research (Snyder 1984), but such effects have not
been previously demonstrated in the price/promotion litera-
ture. The effects of promotion on consumer perceptions are
typically examined either pre- or post-consumption, but we
know of no existing studies that have compared the effects of
promotion both before and after product trial.
Negative quality inferences: discounts versus alternative
strategies
From an attribute framing perspective, discounts provide
consumers with both a higher initial price (was $59.99) and
a lower selling price (now $39.99), either of which might be
used to infer quality. We initially assumed that consumers
would consider both the initial price and the final price of
the discount when trying to determine the quality of the pro-
moted item. This meant that, while the lower selling price of
the discount would be expected to lower quality perceptions
(compared to an item sold at the higher original price), the
presence of the higher initial price would also be expected to
maintain quality perceptions to some extent (compared to an
38 P.R. Darke, C.M.Y. Chung / Journal of Retailing 81 (1, 2005) 35–47
item regularly sold at the lower price). Overall, we expected
quality judgments for the discounted price to fall somewhere
between quality inferences based on the initial price alone
and inferences based on the lower selling price alone.
The current research also examined whether other forms
of promotion/pricing would prove to be less vulnerable to
negative quality inferences and better convey the value of
the offer. Surprisingly, no existing empirical research has
explicitly examined the effects EDLPs have on consumer
perceptions. As mentioned, some experts have speculated
that EDLPs are less likely to undermine product quality, and
are better able to communicate value to consumers than dis-
counts (e.g., Ortmeyer et al. 1991). However, attribute fram-
ing would seem to predict just the opposite. More specifically,
lowering prices in the form of EDLPs provides only the lower
selling price as a basis for inferring quality (EDLP of $39.99).
This suggests that lowering prices in this way should actually
be more vulnerable to negative quality inferences compared
to discounts with the same selling price but also including a
higher initial reference price.
In contrast, attribute framing suggests that free gift offers
should be better able to maintain perceptions of the target
product’s quality than discounts of the same monetary value.
This is because consumers are not likely to correct for the
value of the free gift when inferring the quality of the target
item (Campbell & Diamond 1990). This correction would
involve the additional mental operation of subtracting the
value of the free gift from the overall price of the item before
making any quality inferences. However, attribute framing
studies consistently show that individuals are unlikely to re-
frame information in this way (see Levin et al. 1998, for a
review). Instead, consumers are more likely to consider the
full price of the item when making price-quality inferences,
as this is the most readily available price. For example, if a
product priced at $59.99 was offered with a free gift worth
$20, quality inferences should be based on the full price of
$59.99 rather than the corrected price of $39.99. According
to the attribute framing perspective, this is because the full
price of the item is more salient to consumers than the price
that corrects for the value of the gift.
Summary
With this background, we undertook a series of exper-
iments designed to examine the role that negative quality
inferences play in limiting the positive effects of discounts
on consumer perceptions of value. Experiment 1 examined
our suggestion that discounts should have positive effects
on perceptions of value primarily when consumers are pro-
vided with some additional assurance that the quality of the
promoted item has not changed. In contrast, when no such as-
surances are provided, discounted products should be vulner-
able to negative quality inferences, which undermine percep-
tions of value. Subsequent experiments examined whether
EDLP (Experiments 2a and 2b) or free-gift offers (Experi-
ment 3) would prove to be any less vulnerable to negative
price-quality inferences. Finally, direct tests of the attribute
framing process, as well as the confirmatory bias hypothesis
were conducted in the final experiment.
Experiment 1: price-quality inferences and discount
framing
Method
Procedure
Eighty-two subjects were randomly given a scenario cor-
responding to one of the conditions in the 2 (Price: full-price
vs. discount) × 2 (Quality: assured vs. not assured) between-
subject design. The dependent measures were perceptions of
quality and deal value.
The scenario asked consumers to imagine they needed
a haircut for a job interview the next day, but found their
regular hairstylist was not available. This meant they had
to find another stylist in the phone book. When they called,
those in the full-price condition were told the price at the new
hairstylist was the same as their regular stylist. Subjects in
the discount condition were told the new stylist offered a 50
percent discount. In addition, subjects in the quality assured
condition were told the quality of the haircut at the new place
was the same as their regular stylist, while those in the no-
assurance condition were not given any information about
the service quality.
After reading the scenario, participants rated from 1 (not at
all) to 7 (very) whether the new hairstylist seemed qualified,
reliable, and good. Responses were averaged into an overall
quality index (α = .75). Subjects also rated the value of the
deal using seven point scales anchored as follows: unattrac-
tive/attractive, bad-buy/excellent-buy, extremely unfair/fair,
no-savings-at-all/extremely large savings, extremely worth-
less/valuable (Inman et al. 1997; Lichtenstein & Bearden
1989; Urbany et al. 1988). An overall index was computed
by averaging these items (α = .75). Higher scores indicated
greater deal value. Finally, participants indicated whether the
price had been discounted or not as a manipulation check.
The quality ratings acted as a check on the quality assurance
manipulation.
Results
Eighty-four percent of those in the discount condition
correctly recognized the deal, whereas all participants in
the full-price condition indicated they paid the full price
[χ2 (1) = 59.14, p < .001]. A 2 × 2 ANOVA was computed for
each dependent measure. Follow-up contrasts used the full
MSE. For the perceived quality measure, the ANOVA indi-
cated significant Discount and Assurance main effects [F’s(1,
78) = 16.10 and 5.07, p’s < .05], and a marginal interaction
[F(1, 78) = 2.91, p < .10]. When no quality assurance was pro-
vided, the discounted haircut was perceived as lower in qual-
 P.R. Darke, C.M.Y. Chung / Journal of Retailing 81 (1, 2005) 35–47
ity than the full price haircut [M’s = 3.91. vs. 4.89, p < .001],
whereas the discount effect was not significant when qual-
ity was assured [M’s = 4.59 vs. 4.98, p > .10]. The analysis
for deal value revealed significant Discount and Assurance
main effects [F’s(1, 78) = 26.19 and 7.43, p’s < .01], as well as
a significant interaction [F(1, 78) = 6.26, p < .01]. The price
discount significantly increased the perceived value of the of-
fer when quality was assured [M’s = 5.90 vs. 4.71, p < .001],
but had only a marginal effect on value when the quality was
in question [M’s = 5.08 vs. 4.67, p < .10.].
Discussion
The results of this initial experiment were consistent with
our suggestion that discounts should give rise to negative
quality inferences primarily when there is some doubt as to
the quality of the product. The findings also showed the dis-
count had a positive effect on perceptions of deal value when
additional assurance was provided, whereas these discount
effects were marginal when there was no quality assurance.
The findings were therefore consistent with our prediction
that negative price-quality inferences can undermine the per-
ceived value of a discount frame.
Experiments 2a and 2b: discounts versus EDLPs
The remaining experiments examined the effects discount
offers had on perceptions of quality and value in an adver-
tising context where negative quality inferences were likely
to occur. In particular, these studies investigated whether the
alternative strategy of lowering prices in the form of EDLPs
(Experiment 2a/2b), or providing an unrelated free gift (Ex-
periment 3) might prove any less vulnerable to negative qual-
ity inferences, and better at communicating the value of the
offer.
Importantly, all of the remaining studies included a set
of control conditions where the regular price of the target
item was varied without making any special promotional
claims. These control conditions allowed us to determine
whether negative quality inferences or positive framing ef-
fects would dominate perceptions of the deal. For instance,
by comparing an item discounted from $59.99 to $39.99
with a control condition where the item is regularly sold at
$59.99, we can determine whether the lower selling price
has any negative effects on quality perceptions. In addition,
by comparing the same discount offer to a control condition
where the item is regularly sold at $39.99, we can determine
whether the higher initial price of the discount exerts any
positive framing effects on deal value. Therefore, this design
allowed us to observe any significant negative price qual-
ity inferences, as well was any significant positive framing
effects.
Experiments 2a and 2b examined both EDLPs and dis-
count offers. Participants were given an ad that included
pricing information and were asked to estimate the qual-
39
ity of the product described. The context was closely
based on past studies that found discounts have positive
framing effects on price perceptions and deal value (e.g.,
Urbany et al. 1988). In the experimental conditions, prices
were lowered using either an EDLP or discount claim,
while the price was varied without any extra promotional
claim in the control conditions. Standard price perception
measures were used as an additional means of assessing
any framing effects of discounts. Experiment 2b was a
replication of Experiment 2a, with the difference that the
discounts were explicitly time limited in Experiment 2b
(Inman et al. 1997).
Method (Experiment 2a)
Participants and design
One-hundred and seventy-six undergraduate students
completed the study. The experimental design was a 3 (Offer-
Type: Control, EDLP, Discount) × 3 (Selling-Price: $59.99,
$39.99, $19.99) between-subjects factorial. Perceptions of
product quality and price perceptions served as the main de-
pendent measures.
Procedure
Each person examined an ad for a pair of headphones. The
ad was said to be from the current catalogue for a local store,
and included pricing information for the relevant experimen-
tal condition, a picture of the headphones, and a description
of the item. The description read, “Full bass response. Clear
sound. Foam pad inside ear cups for comfortable fit.” No
brand information was provided.
Independent variables
Pricing information was varied using the final Selling-
Price and the Type of offer made. See Table 1. Levels for
the Selling-Price factor were determined in a pretest by ask-
ing participants to indicate the average price for a pair of
headphones that were of low, average and high quality. Sell-
ing prices of $19.99, $39.99, and $59.99 were selected. The
Offer-Type was varied according to the additional claim at-
tached to the selling price. In the EDLP condition, the claim
of “every day low price” preceded the selling price. Discount
offers framed the selling price relative to a higher initial price
Table 1
Conditions for Experiment 2a
Offer-Type Selling-Price
$59.99 $39.99 $19.99
Control Price $59.99 Price: $39.99 Price: $19.99
Every-day-low EDLP: $59.99 EDLP: $39.99 EDLP: $19.99
price (EDLP)
Discount Was: $79.99 Was: $59.99 Was: $39.99
Now: $59.99 Now: $39.99 Now: $19.99
40 P.R. Darke, C.M.Y. Chung / Journal of Retailing 81 (1, 2005) 35–47
using the phrase “Was (initial price), Now (selling price),” ac-
cording to the format from previous studies (Lichtenstein &
Bearden 1989). For comparison purposes, the initial price for
each condition was set at the level of the next highest selling
price. For the high selling price condition, the initial price
of the discount was set at $79.99, which a pilot study found
was the highest plausible price for high quality headphones.
In the control conditions, no special claims were made (price
$X).
Measures
Subjects first completed items relating to the cover-story.
After this, they completed the perceived quality measure by
rating how well-made the headphones were, the sound qual-
ity, and the overall quality of the headphones. Seven-point
scales were used (−3 to +3), and responses were averaged to
form an index of perceived quality (α = .88). Participants then
completed a standard price perception measure (Lichtenstein
& Bearden 1989; Urbany et al. 1988), where they estimated
the average price and the lowest price for the item else-
where. Responses were averaged to form a price perception
index (r = .83, p < .001). As a manipulation check, partici-
pants were asked to recall the selling price of the item, and
identify whether the item was sold at a discount, an every-
day-low-price, or a regular price.
Results (Experiment 2a)
Manipulation checks
The checks showed participants knew the selling prices
[M’s = $23.63, $40.71, and $59.14, F(2, 169) = 98.98,
p < .001], and the Offer-Type [93 percent, 75 percent, 95 per-
cent correct responses for regular price, EDLP and discount
conditions, χ2 (6) = 243.01, p < .001].
Perceived quality
A 3 (Offer-Type) × 3 (Selling-Price) between-subjects
ANOVA was used to analyze all dependent measures. Follow
up contrasts used the full MSE. The ANOVA showed only the
Selling-Price main effect was significant [F(2, 163) = 5.92,
p < .01]. Contrasts showed the moderate and low priced con-
ditions did not differ [M’s = −0.24 and −0.32], but both of
these were significantly lower in perceived quality than the
high priced condition [M = 0.33, p’s < .01]. These findings
suggest consumers used price to infer quality, although the
price-quality effects were observed between high and mod-
erate price levels only. Also, Offer-Type had no significant
effects [p’s > .25 for both the main effect and interaction].
This implies that both discount and EDLP strategies were
vulnerable to negative quality inferences, and neither strat-
egy was effective in attenuating negative quality inferences
relative to controls.
Price perceptions
There was also a significant main effect of Selling-Price
on price perceptions [F(2, 163) = 15.41, p < .001]. Contrasts
showed that decreases in the selling price significantly de-
creased price perceptions at each level [M’s = $40.17, $32.39,
and $23.89, p’s < .01]. However, there were no significant
Offer-Type effects [p’s > .10]. Overall, this meant that a de-
crease in the selling price lowered price perceptions, but dis-
counts did not frame price perceptions at a higher level.
Method (Experiment 2b)
Ninety-six undergraduate students participated. The main
change from Experiment 2a was the discount was made ex-
plicitly time limited and the design was reduced in size. The
discount condition included the information that the sale was
over at the end of the month (namely May 31), which was
approximately two weeks after the study was completed. The
ad was said to be from the April issue of a locally distributed
catalogue. A 3 (Offer-Type: Control, EDLP, or Temporary
Discount) × 2 (Selling-Price: $39.99 or $19.99) between-
subjects design was used. A high price control condition
was also included (price: $59.99). Finally, a measure of per-
ceived value was added to the questionnaire. Participants
were asked to consider both the quality and the price of the
item, and rate the overall value of the offer from −3 (low) to
+3 (high).
Results (Experiment 2b)
Manipulation checks
The majority of participants correctly identified the type
of offer made [regular price = 86 percent, EDLP = 76 percent,
and discount = 86 percent, χ2 (12) = 133.41, p < .001].
Perceived quality
A 2 (Offer-Type) × 2 (Selling-Price) ANOVA was com-
puted for the index of perceived quality, with additional con-
trasts used to make comparisons with the high priced control
group. All contrasts used the full MSE. Overall, the find-
ings conceptually replicated Experiment 2a. The ANOVA
revealed no significant effects [F’s < 1, p’s > .40]. The con-
trasts showed that perceived quality was higher in the high
priced control condition than all the other conditions. Sup-
porting the price-quality prediction, both moderate and low
priced items [M’s = −0.36 and −0.64] were lower in per-
ceived quality than the high priced control item [M = 0.45,
p’s < .05]. EDLPs [M’s = −0.22 and −0.53] and temporary
discounts [M’s = −0.49 and −0.40] were also lower than the
high priced controls [p’s < .10]. The findings again suggested
that discounts and EDLPs provided no significant protection
against negative quality inferences.
Price perceptions
An ANOVA for price perceptions showed these decreased
with the selling price [M’s = $19.36 vs. $33.30, for low vs.
moderate selling prices; F(1, 72) = 57.31, p < .001]. Again,
there were no significant effects of Offer-Type [p’s > .15],
 P.R. Darke, C.M.Y. Chung / Journal of Retailing 81 (1, 2005) 35–47
suggesting temporary discounts did not frame price percep-
tions at a higher level.
Perceptions of value
The ANOVA for the measure of perceived value showed
no significant effects of either selling price or offer-type
[F’s < 1, p’s > .50]. The contrasts for the high priced con-
trol group were all nonsignificant [p’s > .25]. These findings
implied that none of the offer-types were effective in com-
municating the objective value of the lower price offer.
Discussion
Experiments 2a and 2b suggest that both discounts and
EDLPs were highly vulnerable to negative quality inferences.
Lower prices caused a significant drop in perceptions of qual-
ity regardless of whether they were in the form of an EDLP
or a discount (compared to higher priced control conditions).
Furthermore, neither EDLPs nor discounts provided any sig-
nificant protection against negative quality inferences (these
conditions did not differ from lower priced controls). The
result was that consumers failed to recognize the objective
increase in value relating to the lower selling price of the
headphones. Finally, the results of both studies also showed
that negative quality inferences occurred between high and
moderate price levels but not between moderate and low price
levels. This finding is consistent with Rao and Monroe (1989)
observation that price-quality inferences are more likely to
occur for items that are initially relatively expensive.
From an attribute framing perspective, it is not surpris-
ing that the EDLP claim failed to improve perceived quality,
since it does not provide any specific reference price that
might be used as an alternative cue for making quality in-
ferences. However, it was somewhat surprising that discount
frames did not provide any real protection against negative
quality inferences. While we had expected the lower selling
price to lead to some slippage in perceived quality, we also
expected positive inferences based on the higher initial price
of the discount to counteract this slippage to at least some
extent. In addition, discount offers failed to raise price per-
ceptions to any significant degree, and had no effect on the
perceived value of the offer, in contrast to past findings in the
discount framing literature (Lichtenstein & Bearden 1989;
Urbany et al. 1988). Overall, Experiments 2a and 2b showed
a consistent lack of discount framing across quality, price,
and value perceptions.
Experiment 3: free gifts as an alternative to discounts
Given the observed vulnerability of EDLP and discount
offers to negative quality inferences, it seemed important
to identify alternative forms of promotion that might better
maintain perceptions of quality, and convey the true value of
the deal. We initially proposed that framing the value of an of-
fer in terms of a free gift (price: $59.99, plus a free gift worth
41
$20) should cause consumers to make their quality estimates
on the basis of the full price ($59.99), rather than on the basis
of the price minus the value of the gift ($39.99). In terms of
attribute framing, the full price of the offer should be more
salient to consumers when a free gift is offered, compared
to the corrected price, which should therefore help maintain
perceptions of quality for the target product, and commu-
nicate greater deal value. The attribute framing mechanism
was also directly tested by including measures of the extent to
which each price level was thought to provide a reliable indi-
cation of product quality. If consumers fail to correct for the
value of the gift as predicted, perceptions concerning the re-
liability of the full price ($59.99) should reflect the pattern of
quality judgments, and the reliability for the corrected price
($39.99 = $59.99 minus the $20 gift) should be unrelated to
quality effects.
Finally, this study examined the Levin et al. (1998) sug-
gestion that the attribute framing may lead to a confirma-
tion bias, where initial expectations are magnified when con-
sumers make further evaluations. Confirmation bias is par-
ticularly likely to occur when evaluations are subjective or
ambiguous (Snyder 1984), such as when estimating the qual-
ity of headphones. To examine this hypothesis, participants
rated product quality immediately after seeing the ad, and
again after directly examining the product.
Method
Participants and design
Participants were 85 undergraduate students who were
randomly assigned to one of the experimental conditions. The
conditions included high price ($59.99) and moderate price
($39.99) controls, a standard discount offer (was $59.99, now
$39.99), and a free-gift offer (price: $59.99, plus free $20 gift).
A repeated measure for perceptions of product quality served
as the main dependent variable.
Procedure
Participants completed the study in individual sessions.
They first examined the ad for the headphones, which in-
cluded the picture and product description used in Exper-
iment 2a/2b. We also specified the actual brand name and
model number of the product in the current study (Gamma
LH036). Participants were largely unfamiliar with the brand
(96 percent). In the free gift condition, the ad stated the price
of the headphones was $59.99, and included a free $20 mu-
sic CD of their choice. The prices in the control and discount
conditions were varied as before. (The actual cost of the head-
phones was over $90.)
Product ads were presented online using a simulation of
an internet shopping environment. Participants sat at a com-
puter that displayed the ad on the webpage of a (fictitious)
retailer. After seeing the ad, participants completed the ini-
tial set of quality ratings (see below). Next, subjects directly
examined the headphones described in the ad by listening to
42 P.R. Darke, C.M.Y. Chung / Journal of Retailing 81 (1, 2005) 35–47

a music tape for 30 s. Subjects then completed the same qual-
ity ratings for a second time, as well as the other dependent
measures.
Dependent measures
The same perceived quality ratings used in Experiment
2 were completed, plus an additional rating of the extent to
which the headphones were stylish (α = .84). The measure
of deal value described in Experiment 1 was also completed
(α = .85). In addition, participants indicated their price per-
ceptions (α = .74) by reporting the average price they would
expect to pay elsewhere, their perceptions of the retailer’s
usual price, and the price if the retailer sold the item at cost
(Darke & Freedman 1993; Lichtenstein & Bearden 1989).
As a manipulation check, participants identified the pric-
ing information using a multiple-choice format. Finally, sub-
jects completed a measure of cue reliability. Those in the
high-control, discount, and free-gift conditions evaluated the
reliability of the $59.99 price using three rating scales, rang-
ing from not at all (0) to very (6). Specifically, participants
were asked whether the higher price was: a good indication
of the item’s quality, a reliable indication of the quality of
the item, and reflects the true quality of the item. Those in the
control moderate, discount and free-gift conditions made the
same ratings for the $39.99 price. In the free gift condition,
we explicitly pointed out that $39.99 was the price of the
headphones with the value of the free music CD subtracted
from the overall price. These were averaged to form reliabil-
ity indices for the $59.99 price (α = .89) and the $39.99 price
(α = .91).
percent), moderate price (95 percent), discount (95 percent),
and free gift (96 percent), χ2 (9) = 231.98, p < .001].
Main analyses
Perceived quality
An ANOVA with experimental condition as a between-
subject factor and the two sets of quality ratings as a repeated
measure (ad-only and product trial ratings) revealed a signifi-
cant experimental effect [F(3, 81) = 3.78, p < .05], a repeated
measure effect [F(1, 81) = 31.38, p < .001], and a significant
interaction [F(3, 81) = 3.25, p < .05]. Cell means are reported
in Table 2. Contrasts using the full MSE indicated the per-
ceived quality for the free gift condition was higher than the
moderate-control condition, both after the ad [M’s = 0.83 vs.
0.54, p < .10], and after product trial [M’s = 1.64 vs. 0.61,
p < .05]. Moreover, the free gift condition was similar in
quality to the high-control condition for both sets of ratings
[M’s = 0.71 and 1.24, for post ad and trial ratings]. In con-
trast, the discounted product was lower in perceived quality
than the high-control and free-gift conditions, both after the
ad [M = 0.13], and after product trial [M = 0.70, p’s < .05].
Finally, the pattern of means for the significant interaction
showed that product trial acted to further increase the initial
differences in quality ratings between conditions (see Fig. 1).
Overall, the free gift promotion was effective in maintaining
quality perceptions, whereas the discount offer again proved
vulnerable to negative quality inferences. The observed in-
teraction suggested the effects of promotional framing were
aided by a confirmation bias.

Results Price perceptions

The experimental effect was also significant for price
Manipulation checks perceptions [F(3, 79) = 10.24, p < .001]. These perceptions
Almost all participants (96 percent) correctly identified were higher for the control-high and free gift conditions
the pricing information [correct responses: high price (100 [M’s = $43.76 and $45.21] than the control-moderate and dis-

Table 2
Means for conditions in Experiment 3
Measures Experimental conditions

High control (A) Moderate control (B) Regular discount (C) Free gift (D) Post hoc contrasts
Perceived quality
Ad-only 0.71 0.54 0.13 0.83 D > B, p < .10
A, B, D > C, p < .05
Product trial 1.24 0.61 0.70 1.64 A, D > B, C, p < .05
Value of deal 3.97 3.67 4.08 4.45 D > A, p < .10
D > B, p < .05
Reliability of $59.99 3.38 NA 2.54 3.64 A > C, p < .10
D > C, p < .05
Reliability of $39.99 NA 3.44 3.40 3.30
Price perceptions $43.76 $33.43 $35.00 $45.21 A, D > B, C, p < .05
N 20 22 20 23
NA = not applicable (measure not included in this condition).
 P.R. Darke, C.M.Y. Chung / Journal of Retailing 81 (1, 2005) 35–47
Fig. 1. Effects of promotional frames on quality ratings in Experiment 3.
count conditions [M’s = $33.43 and $35.00, p’s < .05]. This
suggests the free gift was framed in terms of the higher refer-
ence price, whereas there was no positive framing effect for
discounts on price perceptions.
Value of the deal
The experimental manipulation also had a significant ef-
fect on deal value [F(3, 81) = 3.39, p < .05]. The free gift
promotion [M = 4.45] was seen as more valuable than the
regularly priced items [M’s = 3.97 and 3.67, p’s < .10]. The
discount condition was not significantly different from any
of the other conditions.
Perceived reliability
A oneway ANOVA computed for the measure of whether
the higher price point ($59.99) was perceived as a re-
liable indication of quality also proved to be significant
[F(2, 58) = 3.20, p < .05]. The higher price was perceived
as more reliable in the control-high and free gift condi-
tions [M’s = 3.38 and 3.64] than in the discount condition
[M = 2.54, p’s < .10]. Finally, the ANOVA for the perceived
reliability of the moderate price ($39.99) was not significant
[F(2, 61) = 0.076, p > .90].
Testing mediation
The findings for the perceived quality and reliability mea-
sures were consistent with the idea that product quality was
perceived as relatively high for the free gift offer because
the higher price acted as the frame, rather than the price cor-
rected for the gift. A direct test of this mediational hypothesis
43
is provided by comparing the experimental effects on qual-
ity before and after the perceived reliability of the higher
price is covaried (Baron & Kenny 1986). An initial ANOVA
showed a significant experimental effect on perceived quality
after product trial [F(2, 60) = 4.82, p < .01]. However, the ex-
perimental effect was no longer significant [F(2, 57) = 1.21,
p > .30] when the reliability of the higher price was added as
a covariate [r = .40, F(1, 57) = 11.42, p < .001 for covariate].
These findings suggest that the superior quality associated
with the free gift condition was fully mediated by the per-
ceived reliability of the higher price.
Discussion
This study showed the free gift offer maintained quality
perceptions, whereas the discounted product was vulnerable
to negative quality inferences (replicating Experiments 1 and
2a/2b). The results also showed that the initial quality dif-
ferences became further exaggerated following product trial.
The free gift offer also significantly increased the value of
the deal relative to the control conditions, while the discount
frame did not. These findings confirmed the prediction that
framing an offer as a separate free gift should be particularly
good at communicating value to consumers. Discounts were
less effective in this respect. Overall, negative quality effects
undermined the subjective value of the discount, while the
fact quality perceptions were maintained for free gift promo-
tions meant greater value was ultimately conveyed.
There was also direct support for the idea that attribute
framing played a part in maintaining higher perceptions of
44 P.R. Darke, C.M.Y. Chung / Journal of Retailing 81 (1, 2005) 35–47
quality for the free gift offer. The effects of the free-gift
on perceived quality were mediated by the perception that
the higher price was the best indication of the item’s true
quality. Therefore, consistent with the attribute framing pro-
cess specified by Levin et al. (1998), the free gift promotion
seemed to be effective in maintaining perceptions of qual-
ity because consumers made quality inferences based on the
original price rather than the price corrected for the value of
the free gift.
One alternative explanation for the effectiveness of the
free gift promotion in maintaining quality perceptions is that
consumers may have appreciated the fact that the gift would
cost the marketer less than the full $20 value of the CD. If
so, participants may have corrected for only a fraction of
the CD’s value when considering the quality of the head-
phones, rather than correcting for the full $20. Although,
this seemed unlikely, we included a measure of the perceived
costs of the promotion to the seller to investigate. After indi-
cating their responses to the reliability items, participants in
the two promotion conditions rated how costly and expensive
the promotion was for the retailer, from 0 (not at all) to 6 (ex-
tremely). However, the average of these ratings did not reveal
any significant differences [M’s = 2.44 and 2.52 for discount
and free gift, t(40) = 0.19, p > .80], suggesting participants
did not view the value of the gift from the perspective of the
marketer. In addition, any tendency for consumers to assume
the free gift was worth less than $20 would act against our
ability to show the observed increase in the value of the free
gift offer.
General discussion
As predicted, negative quality inferences were shown to
limit the extent to which discount frames were capable of in-
creasing perceptions of deal value (all experiments). Positive
discount framing was observed only when additional qual-
ity assurances were provided, and not when consumers were
less certain about product quality (Experiment 1). In fact,
discount framing proved to be somewhat more vulnerable to
negative quality inferences than we had expected. The initial
price claim provided little help in maintaining perceptions
of quality (Experiments 2 and 3). Furthermore, measures of
price expectations suggested that consumers largely disre-
garded the initial reference price claim. Overall, these find-
ings were generally consistent with the critics’ suggestion
that consumers often consider the discounted price, rather
than the initial price claim, to be the ‘true’ price of the item
(Ortmeyer et al. 1991).
In their review of the literature, Compeau and Grewal
(1998) speculated that it was possible a number of factors
might moderate the effects of discount frames, however they
were unable to specifically test for these moderators in their
meta-analysis. Our findings provide initial evidence for one
such moderator, namely negative price-quality inferences.
Such inferences were essentially controlled for in previous
studies within the discount framing paradigm, since these
studies often provide additional quality assurances, and typi-
cally manipulate the size of the discount by varying the initial
price while holding the final price constant. As noted, it is
unlikely consumers would make negative price-quality infer-
ences under such conditions. The current studies show that
in the absence of quality assurances, and when discounts are
manipulated in the normal everyday manner by lowering the
selling price of the item, negative price-quality effects mod-
erated discount framing. This was true for measures of both
deal value and price perception. Overall, negative quality in-
ferences dominated consumer perception and suppressed any
signs of positive discount framing.
The evidence is consistent with the idea that negative qual-
ity inferences undermined both acquisition utility and trans-
action utility for discounts. In terms of acquisition utility,
negative quality inferences led consumers to conclude they
were receiving a lower quality item at a lower price, rather
than the same quality item at a lower price. In addition, the
fact that price perceptions reflected the selling price but not
the initial price of the discount offer is consistent with the idea
that consumers matched their reference price to the quality
implied by the lower selling price, which would limit trans-
action utility since p* matched p. Once consumers inferred
the quality of the discounted item was lower, they seemed
unwilling to adjust price expectations upwards to match the
initial price claim.
Our studies also examined alternatives to discounts when
negative quality inferences were likely to occur, and we
found that free gift frames were effective in increasing deal
value under such conditions (Experiment 3). When a free
gift offer was made, consumers based their quality judg-
ments on the full price of the item without accounting for
the value of the gift, which maintained perceptions of qual-
ity, and led to higher perceptions of deal value. As men-
tioned negative price-quality inferences are most likely to
occur when the brand name or seller are not well-known
(Rao & Monroe 1989), or when intrinsic cues for product
quality are ambiguous or unavailable (Jacoby et al. 1971).
Under such circumstances, our findings suggest marketers
should consider offering free gifts instead of discounts. Al-
ternatively, Experiment 1 suggested marketers could pro-
vide additional quality assurances when offering discounted
prices.
Lowering prices in the form of EDLPs proved to be highly
vulnerable to negative quality inferences (Experiment 2).
While this finding was predicted by attribute framing, it
clearly contradicts previous speculation that EDLPs should
be better at communicating value to consumers than discounts
(e.g., Ortmeyer et al. 1991). Our finding that EDLPs are vul-
nerable to negative quality inferences adds to existing criti-
cisms of this strategy. These include the suggestion that con-
sumers find EDLPs boring (DeNitto 1993; Weinstein 1992),
that EDLPs are symptomatic of a lack of creativity (Hastings
1993), and that they often reduce margins to a level at which
sales are no longer profitable (Hoch et al. 1994; Reda 1994).
 P.R. Darke, C.M.Y. Chung / Journal of Retailing 81 (1, 2005) 35–47
The promotional effects observed here were generally pre-
dicted by the attribute framing view. According to this view,
EDLP, discount, and free gift frames caused consumers to
focus on different prices, which led them to make different
quality inferences. Discounts and EDLPs focused consumers
on the lower price, leading them to make lower quality in-
ferences, thereby undermining the value associated with the
deal. In contrast, free gift frames focused consumers on the
higher original price of the item, which helped maintain the
level of quality they inferred, and conveyed greater value.
This mechanism was directly confirmed in Experiment 3. It
is important to note that mental accounting (Thaler 1985) can
also explain the greater value consumers attached to free gift
offers in terms of its silver-lining principle. However, this per-
spective cannot account for the negative effects of discount
frames, and mental accounting makes no explicit predictions
for the effects of EDLPs. Moreover, mental accounting does
not make any explicit predictions for the effects of promotion
on perceptions of quality, whereas these perceptions were
central to the attribution framing mechanism. Our findings
add to the attribute framing literature by showing that this
mechanism is also relevant to understanding the effects dif-
ferent forms of sales promotion have on quality inferences
and perceptions of deal value.
Experiment 3 also provided evidence for a confirmation
bias in the effects of promotion on perceived quality. Product
trial served to further exaggerate the initial promotion effects
based on the ad alone. This study is the first to demonstrate
the effects of a confirmation bias in the context of sales pro-
motion. A confirmation bias is most likely to occur in situa-
tions where judgments of product quality are malleable, in the
sense that they are either experiential or ambiguous in nature
(Snyder 1984). We should further note that this finding also
lends additional support for the attribute framing mechanism.
Our studies employed a number of different measures and
manipulations that were closely based on past studies that re-
liably demonstrate positive discount framing effects. These
procedures were sensitive enough to identify the positive ef-
fects of a discount frame when quality was assured in Experi-
ment 1, to identify the effects of the price manipulation in the
control conditions of Experiments 2 and 3, and to identify the
effects of the free gift offer in the final experiment. There-
fore, the failure to observe positive discount effects in the
predicted conditions does not seem likely to be due a lack of
power, nor to some other artifact of the procedures used here.
It might still seem possible that a somewhat different type
of discount format would be better able to maintain quality
perceptions (Krishna et al. 2002). However, additional re-
search we conducted found that even substantial alterations
in the format of the discount made little difference to qual-
ity perceptions. Specifically, a pair of headphones was dis-
counted from $59.99 to $39.99 according to a number of
different formats: (1) a very temporary discount (this week-
end only); (2) a discount available in limited quantities; (3)
a discount available as $20 cash back in a scratch-and-save
contest; and (4) a standard discount presented in the context
45
of other brands regularly priced at $39.99. None of these
discount formats increased perceived quality [M’s = 0.45,
0.54, 0.44, and 0.71] compared to a $39.99 control price
[M = 0.09; F(4, 141) = 1.29, ns]. The current findings were
therefore relatively robust with respect to the format of the
discount.
It might seem possible to explain the negative effects of
discounts observed here in terms of self-perception theory,
which suggests discounts lower quality perceptions because
consumers attribute their product choice to the reward pro-
vided by the discount itself, rather than to the quality of the
product (Scott & Yalch 1980). However, there are a number
of reasons to doubt this explanation in the present case. First,
self-perception studies tend to make very salient the idea
that the promotion is specifically offered as an inducement to
choose one product over another. This was not the case here.
Also, self-perception effects should occur only after a choice
is made (Blattberg & Neslin 1991). However, our participants
were not asked to make any choices before indicating their
quality perceptions, and negative quality inferences were ob-
served in evaluations made both before (all studies) and af-
ter product trial (Experiment 3). Self-perception theory also
has difficulty predicting other aspects of the current findings.
For instance, this view would predict free gift offers should
also induce negative quality judgments (Forehand 2000), but
Experiment 3 showed that quality perceptions were actu-
ally maintained for free gift offers. Finally, self-perception
does not make clear predictions for EDLPs, whereas nega-
tive price-quality inferences clearly account for the EDLP
findings.
It is important to note that certain factors may limit the
effects of a free gift offer. For instance, Simonson, Carmon,
and O’Curry (1994) showed that consumer preference de-
creased when unattractive gifts were offered because con-
sumers thought they were paying extra for a gift they did not
want. In contrast, the gift used in Experiment 3 was likely to
be popular (free music CD of the participant’s choice). In ad-
dition, the monetary value of the gift was explicitly stated in
Experiment 3. This was important because Raghubir (2004)
shows consumers can underestimate the true value of a free
gift when it is not explicitly stated, and thereby limit the
overall value of the offer. It is therefore important to provide
consumers with desirable free gifts, and to directly state the
value of the gift in the ad itself.
The current findings seem to contradict the success that
at least some retailers have had using EDLPs and discounts.
We would attribute their success to additional factors in their
marketing strategy which help avoid negative price-quality
inferences. For instance, Wal-mart has established a positive
reputation of service and quality with its customers, and they
carry many name brand products. EDLPs may have been
more successful for Wal-mart because consumers are less
willing to use price as an indication of quality when store
and brand quality are high. Discounts are also more likely to
be successful in conveying value when additional assurances
are provided for the quality of the discounted item. However,
46 P.R. Darke, C.M.Y. Chung / Journal of Retailing 81 (1, 2005) 35–47
it is not a simple matter to create positive store or brand rep-
utations in the first place. This is an expensive and time con-
suming strategy. Furthermore, EDLPs (and discounts) may
erode brand perceptions in the long-run.
The current findings contribute to the existing litera-
ture in a number of ways. First, they show that negative
quality inferences can serve as an important moderator of
the classic discount framing effects. In addition, free gifts,
but not EDLPs, provided a useful alternative for convey-
ing value to consumers when discounts are likely to under-
mine perceptions of quality. The results also supported an
attribute framing mechanism, which has not been previously
used to understand the effects of promotion on consumer
perceptions. Finally, attribute framing was shown to pro-
duce a confirmation bias that intensified the initial effects
of promotion on consumer perceptions following product
trial.
Acknowledgements
The authors are grateful to Errol Smythe for his help
in programming the internet simulation used in Experiment
3. We would also like to thank Natalie Lam for her help
with data collection. This work was supported by means
of a grant from the Direct Selling Education Foundation of
Canada and the Social Sciences and Humanities Research
Council of Canada. Helpful comments on previous drafts of
this paper were provided by Amitava Chattopadhyay, Darren
Dahl, Raymond Darke, Dhruv Grewal, Dale Griffin, Cynthia
Holmes, Michael Levy, Leaf Van Boven, Chuck Weinberg,
and three anonymous reviewers.
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