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Not All Discounts Are Created Equal: Power Distance Belief And Locus-Of-Discount In A Product Bundle, Hsin-Yi Liao

Business Administration Dissertations

This paper examines the relationship between power distance belief (PDB) – the tendency to accept and endorse power disparity – and preference for a discount on the focal (vs. tie-in) product in a product bundle. The findings show that high PDB consumers prefer a discount on the focal (vs. tie-in) product in a bundle, whereas low PDB consumers’ preference is not affected by the locus-of-discount. This difference is driven by the greater tendency to differentiate among high (vs. low) PDB consumers. Furthermore, contextual factor that affect consumers’ differentiation tendency, namely consumers’ prioritization tendency, set boundary condition for the impact of …