The Inverted U- Shaped Effect of Discount Level on 
Purchase Intention

Long Tang; Lin Lin

doi:10.70711/frim.v2i12.5704

The Inverted U- Shaped Effect of Discount Level on Purchase Intention

Long Tang, Lin Lin

Abstract

Price discounts are a widely utilized marketing tool that significantly influence consumer behavior and brand preferences. While traditional studies emphasize the positive effects of discounts in boosting purchase intentions by enhancing perceived gains and reducing losses,
recent research highlights potential negative impacts of excessive discounts, such as heightened perceived risks and reduced consumer trust.
This study examines the relationship between discount levels and consumer purchase intention, proposing an inverted U-shaped pattern where
purchase intention peaks at an optimal discount level and declines with overly low or high discounts. Using a dual-method approach combining experimental data and empirical analysis of U.S. Walmart retail transactions, we provide robust evidence for this hypothesis. Our findings
offer actionable insights for optimizing discount strategies to balance consumer engagement and profitability effectively.

Keywords

Price Discounts; Consumer Behavior; Purchase Intention; Discount Strategies

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DOI: http://dx.doi.org/10.70711/frim.v2i12.5704

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