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The purpose of this paper is to report the results of two experiments designed to examine the effect on consumers of the way in which price discount messages are expressed, or “framed”.

Both studies involved stated‐preference choice modelling experiments. The aim of the first experiment was to test the hypothesis that a price reduction framed in dollar terms is more effective for high‐priced items, whereas a price reduction framed as a percent discount is more effective for lower‐priced items. The aim of the second experiment was to determine which of four alternative ways of expressing the same 33 per cent price discount – cents off, percent discount, or one of two volume discounts – is most effective.

For two “low‐priced” items, potato chips and cola drinks, the framing of a price discount had little or no effect. However, for two ”high‐priced” items, stereos and …