The first study uses indifference judgments to test whether consumers use the Nominal Value model or the Unit Price model.
STUDY 1: COMPARISON OF THE NOMINAL VALUE AND UNIT PRICE MODELS
Operationalizing the Nominal Value and Unit Price Models
For the Nominal Value model, this can be fit by simply regressing the nominal value of the extra product on the matching discount.
In the Unit Price model, the nominal value of extra product needed to produce the same unit price reduction as a given discount will be:
The Nominal Value models of 19 of the 20 subjects had higher |R.sup.2~'s than their Unit Price models.
The unstandardized regression coefficients for the regressions corresponding to the Nominal Value models tended to be close to 1.0.