An Anchoring and Adjustment Model of Purchase Quantity Decisions

Abstract

How do consumers decide how many units to buy? Whereas prior research on individual consumers’ purchases has focused primarily on purchase incidence and brand choice, the authors focus on the psychological process behind the purchase quantity decision. The authors propose that a simple anchoring and adjustment model describes how consumers make purchase quantity decisions and suggests how point-of-purchase promotions can increase sales. Two field experiments and two lab studies show that anchor-based promotions—presented as multiple-unit prices, purchase quantity limits, and suggestive selling—can increase purchase quantities. The final study shows that consumers who retrieve internal anchors can counter these anchor-based promotions effectively. Firms might receive net benefits from anchor-based promotions depending on whether increases in unit sales reflect increased category consumption, brand switching, variety switching, store switching, or stockpiling.