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According to construal level theory, close (versus far) psychological distance is associated with low (versus high) construal level. Despite the evidence for discount frame effect, it is unclear whether psychological distance and product nature play moderating roles. In addition, little has been known whether the effect of discount frame can extend to other dependent variables such as willingness to pay (WTP). Driven by construal level theory, five experiments were conducted to explore whether the effect of discount frame is dependent on psychological distance and product nature (i.e. utilitarian versus hedonic product).

The experimental method was used, with discount frame, psychological distance and product type as the independent variables and purchase intention, attitude towards the advertisement, perceived value and WTP as the dependent variables. Participants were presented with promotion scenarios in which psychological distance and discount format were manipulated. In order to test the generalizability of results, promotional scenarios for both utilitarian (i.e. backpack bag and shampoo) and hedonic products (i.e. scenery ticket and perfume) were presented. Data were collected via the online experiment platform (i.e. www.Credamo.com).

The authors found an interaction between discount frame and spatial distance in that consumers had more positive attitude toward percent off than amount off under near-spatial distance. However, no interaction was observed between discount frame and temporal, social or hypothetical distance.

Taken together, the current study for the first time reveals that the effect of discount frame is contingent on a specific dimension of psychological distance (i.e. spatial distance), regardless of whether the product is utilitarian or hedonic. Findings from this study for the first time pose a challenge to the notion that construal-level match necessarily leads to more favorable consumer responses, suggesting that there may be a unique mechanism underlying the joint effects of spatial distance and discount frame. The current findings can provide important implications for marketers and retailers in an effort to design effective promotional messages.

The authors investigate the manufacturer's choice of discount schemes in a supply chain with competing retailers.

Using a game-theoretic model, the authors build two discount frameworks and compare and analyze the effects of different discount schemes on the performance of supply chain members.

The authors find that the retail price (market demand) in the quantity discount scheme is always higher (lower) than that in the market share discount scheme. The authors also find that the retailers' preference for discount schemes is antithetical to the manufacturer's preference in most cases. However, under certain conditions, there will be a win-win situation where Pareto-optimization occurs between the manufacturer and retailers when they choose the same discount scheme.

On the one hand, the authors assume that the two retailers are symmetrical in market size and operation efficiency. It would be interesting to study the effect of different discount schemes on retailers when the retailers have different market sizes or operating efficiency. On the other hand, the authors study the manufacturer's choice of discount schemes in a supply chain with one common manufacturer and two competing retailers. However, in practice, there exist other supply chain structures. Future research can examine the problem of choices of discount schemes in other different supply chain structures.

This paper help retailers and manufacturers to choose the best discount schemes.

This paper suggests that a high discount scale is not always beneficial (detrimental) to retailers (the manufacture).

The authors build two discount schemes (the quantity and the market share) in a supply chain consisting of one manufacturer and two retailers, and the authors focus on the effects of different discount schemes on the competition between two retailers. By comparing the two discount schemes, the authors study which discount scheme is the better choice for the manufacturer when facing competing retailers.

Cross-selling becomes critical for business success as pent-up travel demand drives travelers to spend more on vacations. The primary purpose of this research is to identify if an unexpected discount leads to consumers' additional purchases online. This research proposes effective cross-selling strategies across hospitality sectors.

Two experiments were conducted to investigate factors that influence travelers' add-on spending. Study 1 determined the psychological mechanism of unexpected discounts on hotel customers' additional spending by individual thinking styles. A 2 (discount: none vs surprise) x 2 (thinking style: holistic vs analytic) quasi-experimental design was utilized. Study 2 applied the identified pricing strategy by individual thinking styles to cruise line add-on selling. A 2 (discount: none vs surprise) x 2 (product type: hedonic vs utilitarian) x 2 thinking style (holistic vs analytic) quasi-experiment was used.

The findings indicate that an unexpected discount increases holistic thinkers' overall travel spending, regardless of add-on types. Although the unexpected discount effect on analytic thinkers' overall spending was significant, an unexpected discount enhanced their intentions to purchase a hedonic add-on.

Hospitality operators can improve cross-selling strategies with a surprise discount offer. Offering add-on items in the same transaction with a cabin booking will increase add-on purchases. Hotels can make add-on purchases more appealing by emphasizing the experiential aspects of a hotel stay.

This research broadens knowledge of cross-selling by linking add-on purchases to discount pricing on a primary product. The findings provide new strategies to stimulate add-on purchases and maximize profitability.

While regular price discount (RPD) promotions remain popular, marketers have also introduced gambled price discounts (GPDs) in recent years. There is a need to understand the performance and limitation of the relatively novel GPD, because the importance of pricing and the surprise element inherent in GPD could cause the promotions to backfire when inappropriately applied. This study compared the performance of GPD and RPD via consumers' perception of their attractiveness through quality cues of product types (experience and search goods) and word-of-mouth (WOM) content (affective and cognitive).

Analysis of variance (ANOVA) was applied on a 2 (product type: experience goods [hotel rooms] vs. search goods [printers]) × 2 (word-of-mouth type: affective vs. cognitive) × 2 (price promotion type: GPD vs. RPD) between-subjects scenario experimental design (resulting in eight conditions).

Analysis of the 600 returns revealed that RPD does well for both search and experience goods, but GPD is more attractive for the marketing of experience goods. GPD works better with cognitive than with affective WOM.

GPD is a relatively new domain in marketing research. This study contributes to GPD literature and behavioral pricing literature. The study also adds to a better understanding of the dynamics, usefulness and limitations of GPD by considering the roles played by surprise element inherent in GPD and comparing it with RPD.

Product discounts have been widely applied in digital commerce as a method to attract and retain customers to purchase in China. Given that digital channels differ in their attributes, customers may behave differently when they respond to the same discount across channels. However, little attention has been paid to explore the heterogeneity of customer responses to discounts across channels. This study aims to fill in the gap by exploring how customers’ purchase responses to price discounts differ across digital channels.

This study applies a Poisson regression to an unbalanced data set of purchasing history from Chinese footwear brands with 3,510 customers in a two-year time window across the three digital channels (i.e. personal computer [PC], app and mobile website), with a correction for endogeneity by using the Gaussian copula method.

This paper finds that price discounts have the strongest positive effect on consumers’ purchase volumes on the PC channel, followed by the app channel, while discounts show the weakest impact in the mobile website channel. By so, this paper demonstrates that customers respond differently to online and mobile channels, and they also respond differently within mobile channels when they purchase products with price discounts.

This study is original in analyzing the difference in customers’ discount responses across digital channels, offering valuable contributions to existing research on multichannel marketing as well as mobile marketing and providing helpful insights for multichannel merchants to design digital discount strategies.

In this paper, the impact of stock-based compensation and further the joint effects of stock-based compensation and investor sentiment on pension discount rate choice is examined.

The hypotheses is tested using fixed effects models and instrumental variable analysis where pension discount rate is the dependent variable, and stock-based compensation and investor sentiment are our variables of interest.

It was found that pension discount rate is negatively associated with managers' stock-based compensation. Further analysis indicates that managers with larger stock-based compensation tend to adjust down their pension discount rates in higher (smaller) degree, responding to high (low) investor sentiment.

The findings provide important insights into how managers use pension discount rates to engage in earnings management. Understanding these relationships has implications for interpreting pension numbers reported in the financial statements and designing pension accounting rules that minimize the possibility that managers take advantage of the complexity associated with pension accounting to influence the reported earnings and executive compensation. Moreover, the findings suggest the need for increased attention from boards of directors, auditors and regulators to reported pension liabilities and service costs, especially for firms paying higher proportion of stock-based compensation to managers and during periods of high investor sentiment.

The findings contribute to the extant literature by identifying the joint impacts of stock-based compensation and investor sentiment as incentives for pension discount rate manipulation. The empirical results of this study also have important implications for corporate governance and regulation.

This paper aims to examine how the temporal distance can influence the effect of the scarcity message. To demonstrate this effect, the authors use the limited-quantity flash sales and compare two types of mixed promotion method comprising discount rate and limited quantity.

The results of the experiment reveal that consumers in the temporally distant condition have a relatively high-level construal of the limited-quantity flash sales and are more likely to value desirability (discount rate) over feasibility (limited quantity).

When the expected value is identical, consumers prefer limited-quantity flash sales with smaller limited quantity but higher discount rates. However, consumers in the temporally near condition have a relatively low-level construal of the limited-quantity flash sales and are more likely to value feasibility (limited quantity) over desirability (discount rate).

When the expected value is identical, consumers prefer limited-quantity flash sales with lower discount rates but larger limited quantity.

The purpose of this paper is to examine whether or not a calendar time anomaly exists in the number and discount of seasoned equity offerings (SEOs) from 1980‐2004.

Regression analysis was used on data from SEOs offered from 1980 to 2004 to determine the significance of the SEO discount over days‐of‐the‐week and the significance of factors relating to SEOs offered on a Monday. The characteristics of Monday SEOs were compared to those offered on other days of the week.

Monday has the fewest number of SEOs with a statistically significant larger offer price discount, on average, than issues done on other days of the week. This has been attributed to the Monday effect, in part to the implementation of Rule 10b‐21, which led to reduced short‐selling pressure and reduced the uncertainty associated with the weekend effect on the part of the issuing firm.

This paper adds value to the finance literature in that it extends the research on calendar‐time anomalies in financial markets. It also adds to the existing research on SEOs and notes characteristics in this particular section of the markets that may be important to both issuers and investors.

Contracting is an important issue in supply chain management. In this paper, the authors aim to discuss and compare the manufacturer's contracting options when the retailer faces a traditional newsvendor problem with a fixed retail price: a wholesale price only contract, a wholesale price discount contract, a returns policy contract, and a returns policy with the wholesale price discount contract. The paper also aims to examine how these contracting options affect decisions of the manufacturer and the retailer, as well as the supply chain efficiency.

Models are developed based on the manufacturer's four contracting options. The manufacturer's optimal wholesale prices have been obtained. The ordering decisions of the retailer are discussed in each of the manufacturer's four contracting options. The paper also uses numerical examples to illustrate the author's managerial insights and results.

As compared to the wholesale price only contract, it is found that implementing a wholesale price discount policy effectively encourages the retailer to order more product and enhances the retailer's profit at the expense of lowering the manufacturer's profit. It is also found that when the manufacturer offers a returns policy and if this policy cannot enhance the retailer's profit, a returns policy with the wholesale price discount contract can lead to a win‐win situation for both the manufacturer and the retailer.

The research provides managerial insights on how different contracts affect decisions and efficiency of the supply chain.

This study examines the relationship between U.S. monetary policy changes and financial market reactions; in particular, the fluctuations in interest rates and exchange rates for the U.S., Britain, Canada, France, Germany, and Japan are related to changes in the U.S. Federal Reserve discount rate for the period 1980–1991. Consistent with previous research, the results indicate a significant relationship between U.S. interest rates and changes in the discount rate throughout the test period. Further, the relationship between non‐U.S. interest rates and the U.S. discount rate is minimal during the first half of the test period but strong in the second half of the period. As expected, statistically significant results were not found with respect to exchange rates. These results suggest an increase both in financial market integration and in the U.S. Federal Reserve's role as an international financial policymaker.