917734

research-article2020
JHTXXX10.1177/1096348020917734Journal of Hospitality & Tourism ResearchNoone, Lin / Scarcity-Based Price Promotions

Scarcity-Based Price
Promotions: How Effective are
they in a Revenue Management
Environment?

Breffni M. Noone
Michael S. Lin
Pennsylvania State University

Two key characteristics of revenue management (RM) environments–fixed capacity

and the application of variable pricing–have the potential to influence consumers’
reactions to scarcity-based price promotions. In this study, we explore consumer
reaction to two types of restrictions on price promotions-limited-time scarcity (LTS)
and demand-driven limited-quantity scarcity (LQS)-in the RM context. We propose
a moderated mediation model, wherein perceived consumer competition, perceived
price uncertainty, and anticipated regret mediate the price promotion type (restricted
vs. unrestricted)-booking intentions relationship, and booking lead-time moderates
the relationship of price promotion type with perceived consumer competition and
price uncertainty. Our findings suggest that LTS and LQS are effective in driving
consumers’ perceptions of competition for available inventory and price uncertainty
when booking lead-time is long. In turn, heightened perceptions of competition and
price uncertainty amplify anticipated regret, leading to a positive effect on booking
intentions. Conversely, when booking lead-time is short, restrictions-based price
promotions do not differ significantly from nonrestricted promotions in terms of
their effect on consumers’ booking intentions. This research provides guidance for
hospitality marketing managers regarding how, and when, to employ scarcity-based
price promotions to influence consumers’ booking behavior.

Keywords: revenue management; price promotions; consumer competition; price

uncertainty; booking lead-time

Introduction

Revenue management (RM) has long been applied in the airline, car rental,
and hotel industries, and its application in a number of other service contexts
including restaurants, function space, golf courses, and spas is gaining traction
(see, e.g., Carroll & Grimes, 1995; Kimes et al., 1998; Noone & Maier, 2015).
Services that apply RM share a set of distinct characteristics, including a

Journal of Hospitality & Tourism Research, Vol. 44, No. 6, August 2020, 883­–907
DOI: 10.1177/1096348020917734 ogdr/.oi/p:stht

© The Author(s) 2020

883
884   JOURNAL OF HOSPITALITY & TOURISM RESEARCH

relatively fixed capacity, perishable inventory, reservations that are made in

advance, time-variable demand, segmentable markets, high fixed costs, and a
relatively low variable cost structure (Kimes & Schruben, 2002). In this context,
pricing constitutes a key strategic lever of RM, with variable pricing employed
to balance capacity utilization and demand.
The online environment plays an important role in a firm’s use of pricing in
RM. It provides a means to push price promotions into the market when required
to support capacity management goals in a timely and cost-effective manner.
However, an online price promotion may not stimulate demand as intended if it
is not perceived by the consumer as sufficiently superior to, or distinct from, the
many other promotional offers available in the marketplace. This raises an
important question: Given the frequency with which consumers are currently
exposed to price promotions, what are the factors that motivate consumers to
respond favorably to a particular price promotion?
There are two broad categories of scarcity messages that can be attached to a
price promotion: limited-time scarcity (LTS) and limited-quantity scarcity
(LQS; Cialdini, 2008). LTS refer to scarcity that is supply-side driven. The firm
defines a time restriction at the outset of a promotional offer by stating a more or
less precise borderline on availability (e.g., “Only available until x,” “Today
only”). With LQS, scarcity can arise due to changes in supply or demand. Where
scarcity is due to supply, the firm limits a given promotional offer to a pre-
defined quantity of a product (e.g., “First 100 consumers only,” “Limited quanti-
ties only”), while LQS due to demand arises during the selling process, and the
firm explicitly communicates the scarcity, and imminent sell-out, of the product
(e.g., “Only x rooms left”). It is this latter type of LQS, demand-driven LQS,
which is of interest in this study.
While scarcity messaging has received much attention in the literature, to our
knowledge the relative effects of LTS and demand-driven LQS on consumer
behavior have not been investigated. Furthermore, with few exceptions (e.g.,
Suri et al., 2007), previous scarcity studies have been conducted in the context
of consumer goods, overlooking the impact that characteristics of capacity-con-
strained services may have on consumers’ reactions to scarcity messaging. In
this research, we examine the roles of perceived consumer competition, per-
ceived price uncertainty, and anticipated regret in consumers’ reactions to scar-
city messages in the context of price promotions for services to which RM is
applied. We argue that two characteristics of the RM environment–fixed capac-
ity and the application of variable pricing–may influence how consumers per-
ceive consumer competition and price uncertainty when exposed to different
types of price promotions: restricted (i.e., LTS and demand-driven LQS) and
unrestricted (i.e., no scarcity message). Furthermore, prior research has explored
the role of booking lead-time (i.e., how far in advance the consumer reserves a
service) in consumer reaction to unit and option scarcity (Song et al., 2019).
Here, we extend the literature by proposing that relationship of price promotion
type (restricted and unrestricted) with perceived consumer competition and
 Noone, Lin / SCARCITY-BASED PRICE PROMOTIONS 885

price uncertainty may be moderated by booking lead-time. Finally, we examine

the potential effect of anticipated regret in the price promotion type–booking
intentions relationship.

Literature Review

Scarcity Messaging

Prior research suggests that scarcity messages can have a positive impact on
consumers’ evaluations of, and attitudes toward, the object of a message (e.g.,
Campo et al., 2004; Jang et al., 2015; Wu et al., 2012). For example, Inman et al.
(1997) demonstrated in the context of grocery store products that restrictions,
including time and purchase limits, can serve to accentuate deal value. Similarly,
using experimental and scanner panel data, Aggarwal and Vaidyanathan (2003)
found that limiting the duration of a promotional offer had an accelerating effect
on purchases. Participants also had a lower intent to search for a better deal
under a limited time–offer condition.
A number of studies have examined the relative effects of different types of
scarcity messages on consumer behavior. For example, Gierl et al. (2008) con-
ducted a series of experiments in the context of conspicuous and nonconspicu-
ous goods, where they examined the relative effects of demand- and supply-driven
LQS on product desirability. Their results show that in the context of conspicu-
ous goods, supply-driven LQS messages had a positive impact on product desir-
ability while demand-driven LQS messages had a negative impact. However,
such effects were not observed for nonconspicuous products. In a follow-up
study, Gierl and Huettl (2010) examined the relative effects of demand- and
supply-driven LQS on consumers’ product evaluations, finding that the appear-
ance of a positive scarcity effect depends on the product’s suitability for con-
spicuous consumption. In their study of the differential impact of demand- and
supply-driven LQS on purchase intentions, Ku et al. (2012) found that consum-
ers’ reaction was influenced by their motivational orientations. Prevention-
focused participants were more inclined to adopt a product when it was perceived
to be demand-, rather than supply-, scarce, while those who were identified as
promotion-focused responded positively to scarcity attributed to supply short-
fall. In their examination of the relative effects of LTS and supply-driven LQS,
Aggarwal et al. (2011) found supply-driven LQS to be more effective than LTS
in influencing consumers’ purchase intentions and attributed this differential
effect to consumer competition. More recently, Pham and Lopez (2017) exam-
ined the role of goal frames in consumers’ reactions to demand- and supply-
based scarcity messages. They found that, supply-based messages were superior
to demand-based scarcity messages when the goal frame was hedonic in nature,
while demand-based messages induced higher purchase intentions in the context
of gain and normative goal frames.
In this research, we seek to extend the scarcity literature by examining how
restrictions, in the form of LTS and demand-driven LQS messages, affect how
886   JOURNAL OF HOSPITALITY & TOURISM RESEARCH

consumers respond to price promotions for services to which RM is applied.

In this context, we consider two characteristics of the RM environment–fixed
capacity and the application of variable pricing–to explain how price promo-
tion type (restricted and unrestricted) influences consumers’ perceptions of
competition and price uncertainty. We also examine the moderating role of
booking lead-time in the relationship of price promotion type with perceived
consumer competition and perceived price uncertainty. Finally, we examine
the influence of anticipated regret in the price promotion type–booking inten-
tions relationship.

Price Promotion Type and Perceived Consumer Competition

Prior research suggests that not only do consumers want an item more when
it is scarce, but also they want it most when they are in competition for it
(Cialdini, 2008). In their study of scarcity messages, Aggarwal et al. (2011)
defined perceived consumer competition as the act of a consumer’s striving
against one or more consumers for the purpose of achieving a desirable eco-
nomic or psychological reward. Based on the premise that scarcity can have a
stronger effect on consumer behavior when it is created in such a way that con-
sumers perceive that they are in direct competition with other consumers,
Aggarwal et al. (2011) argued for a mediating effect of perceived competition on
the scarcity message–purchase intentions relationship. They demonstrated that
attaching a scarcity message to a promotional offer can stimulate a greater sense
of competition than an unrestricted promotional offer. Furthermore, they pro-
vided support for a stronger positive effect of supply-driven LQS (e.g., “first 100
customers only”) on purchase intentions than LTS, by virtue of the higher per-
ceptions of perceived competition that supply-side LQS elicits. They argued that
with an LTS, a consumer does not compete against other consumers. Rather,
they simply have to meet the deadline imposed by the firm, as opposed to the
competition for the restricted number of units of inventory made available by the
firm under supply-driven LQS.
Here, we build on the work of Aggarwal et al. (2011) and propose that in the
context of capacity-constrained services, LTS- and demand-driven LQS-based
price promotions may not yield a significantly different effect on consumers’
perceptions of competition for available inventory. By their nature, demand-
driven LQS messages explicitly draw consumers’ attention to the amount of
inventory remaining for sale. Since the number of units of inventory available
for sale is restricted, this can heighten the consumers’ sense of competition with
other consumers for the limited inventory available at the discounted price.
However, even in the absence of explicit messaging regarding remaining inven-
tory, an LTS-based price promotion may heighten consumers’ perceptions that
they are “in competition” with other consumers for a fixed supply of inventory.
Because of the limited time associated with the availability of the price promo-
tion, consumers may perceive that the time limit will accelerate consumer
 Noone, Lin / SCARCITY-BASED PRICE PROMOTIONS 887

purchase and, consequently, will prompt competition among consumers for the
limited amount of inventory that is inherently available. Thus, we hypothesize
the following:

Hypothesis 1Ao (H1Ao): When presented with a price promotion for a capacity-con-
strained service, consumers’ perceptions of competition will vary significantly by
price promotion type, LTS versus demand-driven LQS.
Hypothesis 1Aa (H1Aa): When presented with a price promotion for a capacity-con-
strained service, consumers’ perceptions of competition will not vary significantly
by price promotion type, LTS versus demand-driven LQS.

Furthermore, while the work of Aggarwal et al. (2011) suggests that a

restricted promotional offer will elicit a greater sense of competition than an
unrestricted promotional offer, we suggest that in the context of capacity-con-
strained services, the price promotion type–perceived competition relationship
will be moderated by booking lead-time. Specifically, we expect that when
booking lead-time is long, restricted price promotions (i.e., LTS and demand-
driven LQS) will garner greater perceptions of competition than an unrestricted
price promotion. When booking lead-time is short, we expect that this differen-
tial will be less pronounced.
Construal level theory (CLT) proposes that temporal distance changes peo-
ple’s responses to future events by changing the way people mentally represent
those events (Trope & Liberman, 2003). When considering events in the distant
future, individuals commit themselves to options with outcomes that may be
infeasible but highly desirable (Liberman et al., 2007). Thus, we expect that in
the absence of a scarcity cue, the consumer is likely to focus on the desirability
of a given price promotion and are less likely to consider the risk that inventory
will not be available should they delay purchase. Consequently, we expect that
unrestricted price promotions will yield lower consumer perceptions of con-
sumer competition than restricted price promotions that trigger the consumer to
consider inventory availability, and associated consumer competition for that
inventory. Conversely, CLT suggests that when considering near-future options,
individuals prefer those with outcomes that are highly feasible (Trope &
Liberman, 2003). Thus, when booking lead-time is short, consumers, regardless
of price promotion type, are likely to be focused on the feasibility of securing
inventory given the inherently limited supply available for sale. This focus on
securing inventory is likely to heighten the time-pressed consumer’s perceptions
that they are competing with other consumers for that inventory. Thus, we expect
that the gap in perceived consumer competition between restricted and unre-
stricted price promotions will be less pronounced when booking lead-time is
short (vs. long lead-time). Therefore, we hypothesize the following:

H1Bo: Booking lead-time will not moderate the price promotion type–perceived con-
sumer competition relationship.
888   JOURNAL OF HOSPITALITY & TOURISM RESEARCH

H1Ba: Booking lead-time will moderate the price promotion type–perceived con-
sumer competition relationship. When booking lead-time is long, restricted price
promotions will drive greater perceptions of consumer competition than unre-
stricted price promotions. When booking lead-time is short, the gap in perceived
consumer competition across price promotion type conditions will be less
pronounced.

Price Promotion Type and Price Uncertainty

Price uncertainty (Lemieux & Peterson, 2011; Mehta et al., 2003; Tewari,
2014) represents one of several types of consumer uncertainty (e.g., rela-
tional: Knobloch et al., 2010; product: Wansink et al., 2012; and environmen-
tal uncertainty: Milliken, 1987) that have been examined in the literature.
While price uncertainty can arise for a number of reasons such as a relative
unfamiliarity with a given product or service (Alba & Hutchinson, 1987;
Brucks, 1985), or insufficient prepurchase search and processing of price
information (Dickson & Sawyer, 1990; Mazumdar & Monroe, 1992; Zeithaml,
1982), the key driver of price uncertainty in the context of RM is variability
in the market prices of a product (Winer, 1989). With the price fluctuation
inherent in the application of variable pricing, consumers can never be certain
whether they are buying at the best price, or if a lower price will become
available later in the booking window. In our examination of consumer reac-
tion to price promotions, we define price uncertainty as consumers’ doubt
regarding their ability, should they delay purchase, to secure a price as good
as that offered under a price promotion. In other words, under high price
uncertainty, consumers will be highly doubtful of their ability to secure a
price similar to a promotion price once the promotion expires (Lemieux &
Peterson, 2011).
We propose that when presented with a price promotion, the degree to which
consumers perceive price uncertainty depends on the extent to which they
engage in counterfactual thinking. Counterfactual thinking refers to the ten-
dency to create alternatives to what has actually happened (Roese, 1997). Thus,
counterfactual thinking, in the context of a price promotion, is likely to result in
the consumer imagining that they might be able to secure a better price post-
promotion, and this may, in turn, diminish their price uncertainty. However, we
also expect that the degree to which consumers engage in counterfactual think-
ing will be influenced by booking lead-time.
Park and Jang (2018) draw on the concept of temporal discounting to
explain how temporal distance might affect counterfactual thinking.
Temporal discounting implies that consumers will perceive future benefits
as less valuable than benefits in the present (Angeletos et al., 2001; Strotz,
1955). In the context of price discounts, this suggests that consumers will
perceive the utility derived from a price discount as greater when the tempo-
ral distance is shorter rather than when it is longer (Park & Jang, 2018).
 Noone, Lin / SCARCITY-BASED PRICE PROMOTIONS 889

Thus, when temporal distance is short (vs. long), and the perceived utility of
a price discount is high, consumers are less likely to consider alternative
outcomes such as the possibility of getting a lower price (i.e., they are less
likely to engage in counterfactual thinking). Building on this, we suggest
that, when booking lead-time is short, there will be no significant differences
in consumers’ perceptions of price uncertainty across different types of price
promotions (restricted and unrestricted). Regardless of whether or not a
restriction is tied to a price promotion, the perceived utility of the price dis-
count is likely to be high. Thus, the consumer is unlikely to engage in coun-
terfactual thinking, and uncertainty regarding their ability to secure a better
price should they delay purchase is likely to be high. Research in the domain
of risk-taking under time pressure also points to a likelihood that consumers’
perceived price uncertainty will be high when booking lead-time is short.
When under time pressure, consumers tend to engage in relatively intuitive
decision making, a faster, less effortful, and more emotional approach to
decision making than a deliberate decision-making process (Kirchler et al.,
2017). In that context, and in line with prospect theory (Kahneman, 2011), it
has been demonstrated that consumers tend to be more risk-averse for gains
(Kirchler et al., 2017). A price discount represents a gain for the consumer.
Thus, when booking lead-time is short, and consumers are under pressure to
make a purchase decision, this risk aversion in gains is likely to lead con-
sumers to doubt their ability to secure as good a discount if they delay pur-
chase (i.e., price uncertainty will be high).
Conversely, we propose that when booking lead-time is long, consumers’
perceptions of price uncertainty will be lower for unrestricted (vs. restricted)
price promotions. The notion of temporal distance suggests that value realized in
the future will be devalued (Ainslie & Haslam, 1992; Mischel & Staub, 1965;
Thaler, 1981). Consequently, as temporal distance increases, consumers are
more likely to engage in counterfactual thinking (Park & Jang, 2018). With
counterfactual thinking comes consideration of alternatives, and consumers’
uncertainty regarding their ability to secure a lower price later in the booking
horizon is likely to be diminished. Thus, when a price promotion is unrestricted,
and consumers experience no time pressure or sense of urgency, we expect that
they will engage in counterfactual thinking and consider the possibility of secur-
ing a lower price at a future date. This behavior is consistent with the notion that
in the absence of time pressure, consumers can engage in more effortful, cogni-
tive information processing (Mann & Tan, 1993). In contrast, restricted price
promotions, both demand-driven LQS and LTS, induce a sense of urgency to
secure inventory from a limited supply. This creates a sense of time pressure that
will diminish consumer engagement in counterfactual thinking, and induces a
need for cognitive closure (i.e., the need to come rapidly to a definite decision
(Kruglanski & Webster, 1991). Not unlike when booking lead-time is short, this
will drive a focus on taking advantage of the discounted price. Thus, we hypoth-
esize the following:
890   JOURNAL OF HOSPITALITY & TOURISM RESEARCH

H2o: Booking lead-time will not moderate the price promotion type–perceived price
uncertainty relationship.
H2a: Booking lead-time will moderate the price promotion type–perceived price
uncertainty relationship. When booking lead-time is short, there will be no
significant difference in perceived price uncertainty across price promotion
type conditions. When booking lead-time is long, perceived price uncertainty
will be lower for unrestricted price promotions than for restricted price
promotions.

Anticipated Regret

Zeelenberg (1999) defines regret as a negative, cognitively based emotion

that consumers experience when realizing or imagining that their present situa-
tion would have been better, had they decided differently. Research has shown
that anticipated regret affects consumer decision making (Jiang et al., 2016),
with consumers who anticipate postpurchase regret tending to make choices that
minimize or alleviate that regret (Zeelenberg et al., 1996). Here, we suggest,
there is a positive relationship between perceived consumer competition and
anticipated regret. The greater the degree of competition that consumers per-
ceive there is for a limited supply of inventory, the more likely they are to expe-
rience anticipated regret. The potential to lose out on inventory to other
consumers will trigger this anticipated regret. Equally, we expect that there will
be a positive relationship between perceived price uncertainty and anticipated
regret. The more doubtful that consumers are that they can secure a better price
if they delay purchase, the more likely they are to experience anticipated regret
if they do not purchase immediately (Lemieux & Peterson, 2011). Furthermore,
we expect, in line with previous literature, that there will be a positive relation-
ship between anticipated regret and booking intentions (Kim et al., 2013). Thus,
we hypothesize the following:

H3o: There is no relationship between perceived consumer competition and antici-

pated regret.
H3a: There is a positive relationship between perceived consumer competition and
anticipated regret.
H4o: There is no relationship between perceived price uncertainty and anticipated
regret.
H4a: There is a positive relationship between perceived price uncertainty and antici-
pated regret.
H5o: There is no relationship between anticipated regret and booking intentions.
H5a: There is a positive relationship between anticipated regret and booking
intentions.

The conceptual model summarizing the study’s hypotheses is provided in

Figure 1.
 Noone, Lin / SCARCITY-BASED PRICE PROMOTIONS 891

Figure 1
Conceptual Model

Note: H = hypothesis.

Method

Procedure

The online purchase of hotel accommodation was selected as the context for
testing the study’s hypotheses. A 3 (price promotion type: LTS, demand-driven
LQS, and unrestricted) × 2 (booking lead-time: short and long) between-subjects
experimental design was employed. In terms of the two restricted price promo-
tions, the message format was in line with that employed on hotel and online travel
agent (OTA) websites, with the LTS-based message indicating that the price pro-
motion was available “Today only!”, while the demand-driven LQS message indi-
cated “In high demand! We have 3 left at this price.” Prior work has emphasized
the need to ensure equivalence in the potency of restrictions (Aggarwal et al.,
2011). Therefore, a pretest, using Amazon Mechanical Turk, was employed to
establish an appropriate number of rooms to include in the demand-driven LQS-
based price promotion condition. In total, four levels of room availability (“2
rooms left,” “3 rooms left,” “4 rooms left,” and “5 rooms left”) were tested, with
an equal number of participants (n = 21) assigned to each of five experimental
conditions (i.e., the 4 “Rooms left” conditions, and the “Today only” condition).
Participants were asked to rate their perceptions of inventory availability using
two items, and we found that there were no significant differences in ratings across
the two items for the “Today only” and “3 rooms left” conditions (Eisend, 2008;
Lee & Seidle, 2012): “How would you rate the availability of rooms at the hotel at
the advertised special rate?” (7-point scale anchored by not at all restricted to very
restricted; Mtodayonly = 4.79, M3roomsleft = 5.32, p >.1); “What was the availability
of rooms at the hotel at the advertised special rate?” (7-point scale anchored by
low availability to high availability; Mtodayonly = 3.47, M3roomsleft = 2.79, p >.1).
With regard to booking lead-time, we chose time frames that were consistent with
prior work (Song et al., 2019): 4 days in the short booking lead-time condition and
3 months to represent a long booking lead-time.
892   JOURNAL OF HOSPITALITY & TOURISM RESEARCH

In terms of the main study, participants in all six experimental conditions

were informed that they were planning a weekend leisure break in a major U.S.
city. They were informed the average nightly rate for midscale hotels in the city
was around $210 per night. They were then told that they had come across a
midscale hotel offering a special nightly rate of $159, a 25% discount on the
room rate. The baseline room rate (i.e., $210 for the market) was based on the
weekend rates advertised on OTAs for midscale hotels in a major U.S. city loca-
tion, with the 25% discount representing the actual average percentage discount
on midscale hotel prices in that market. This discount level was also in line with
the range of discounts (20% to 30%) identified as attractive to consumers in
prior research (Gupta & Cooper, 1992). Participants were also provided with a
view of the hotel on a fictional OTA website, designed to mimic the user experi-
ence of a typical OTA site (see the supplemental appendix, available online).
After reviewing the OTA site, participants were asked to complete manipula-
tion checks and the measures for the variables of interest. The full study survey
was pretested using data collected via Amazon Mechanical Turk. For the main
study, a third-party data collection company was employed for data collection.

Measures

Perceived consumer competition was measured using a three-item, 7-point

Likert-type scale (Aggarwal et al., 2011; Cronbach’s α = .89). Perceived price
uncertainty was measured using a four-item, 7-point Likert-type scale (adapted
from Homburg et al., 2012; Cronbach’s α = .85). A two-item, 7-point Likert-
type scale was used to measure anticipated regret (Tsiros & Mittal, 2000; ρ =
0.77, p < .001). A three-item, 7-point Likert-type scale was used to measure
booking intentions (Maxwell, 2002; Cronbach’s α = .91).
Due to their potential to influence consumers’ reactions to restriction-based
price promotions, a number of control variables were included in our analyses:
familiarity with variable pricing practices, price consciousness, deal proneness,
and attribution for the limited availability of the price discount. Given that this
study is concerned with consumer reaction to promotional offers for capacity-
constrained services where variable pricing is typically applied, participants’
familiarity with variable pricing practices was measured to ensure that consum-
ers were aware that they were evaluating the promotional offer in that context.
Familiarity with variable pricing practices was measured using a two-item,
7-point Likert-type scale adapted from Wirtz and Kimes (2007; ρ = 0.70, p <
.001). As expected, participants indicated a relatively high awareness of the
application of variable pricing practices in the hotel industry (M = 5.49; SD =
1.16). Prior research suggests that price consciousness can affect consumers’
evaluations of price discounts (Palazón & Delgado, 2009). Thus, price con-
sciousness was measured using a four-item, 7-point Likert-type scale
(Lichtenstein et al., 1993; Cronbach’s α = .88). It has also been suggested that
deal prone consumers are more likely to respond to promotional deals
 Noone, Lin / SCARCITY-BASED PRICE PROMOTIONS 893

(Hackleman & Duker, 1980; Thaler, 1983). Therefore, a six-item, 7-point Likert-
type scale was used to measure deal proneness (Wirtz & Chew, 2002; Cronbach’s
α = .82). Arguably, attribution for the limited availability of the price discount
(i.e., whether it is controllable by the service provider, or not) may affect how a
consumer reacts to a restriction-based price promotion. Thus, we measured con-
trollability attribution using a three-item, 7-point semantic differential scale
(Betancourt, 1990; Hess et al., 2003; Cronbach’s α = .84). See Table 1 for the
scale items used in the study.
To ensure that they understood the magnitude of the discount on offer, par-
ticipants were asked to select the approximate dollar value of the discount: 5%,
15%, 25%, or 35%. All participants correctly selected 25%. For the scarcity
message manipulation, participants were asked to indicate if the special rate that
the hotel was offering was available for today only. All participants in the LTS
condition selected yes, and all other participants selected no. Participants were
also asked to indicate how many rooms were left at the special rate that the hotel
was offering: four rooms, three rooms, two rooms, or information is not pro-
vided. As expected, all participants in the demand-driven LQS condition selected
three rooms, and all other participants selected information is not provided. With
regard to the booking lead-time manipulation, participants were asked to select
when they would be staying at the hotel: 4 days from now, a week from now, 3
months from now, and 6 months from now. As expected, all participants in the
short booking lead-time condition selected 4 days from now, and those in the
long booking lead-time condition selected 3 months from now.

Results

Sample
In total, 256 individuals participated in the study, with a roughly equal num-
ber of participants in each experimental condition (n = 42 for the long booking
lead-time/unrestricted and long booking lead-time/LTS conditions; n = 43 for
the short booking lead-time/unrestricted; short booking lead-time/LTS; short
booking lead-time/demand-driven LQS and long booking lead-time/demand-
driven LQS conditions). Of the sample, 59.4% (n = 152) were female, with
74.6% (n = 191) of participants between 26 and 65 years of age. In total, 69.1%
(n = 177) of participants had stayed in a hotel for leisure three or more times
during the 12 months prior to completion of the survey, and all of the partici-
pants had personally booked a hotel for a leisure stay using an OTA in the 12
months prior to completion of the survey. See Table 2 for the full characteristics
of the sample.

Hypotheses Tests

The cell means for perceived consumer competition, perceived price uncer-
tainty, anticipated regret, and booking intentions are reported by experimental
894   JOURNAL OF HOSPITALITY & TOURISM RESEARCH

Table 1
Scale Items

Perceived consumer competition (1 = strongly disagree, 7 = strongly agree)

  I think I might lose the opportunity to book this hotel if others book it first.
  I feel there is a lot of competition from other buyers to book this hotel.
  In order to get a room at this hotel, I think I have to make a booking before others do.
Perceived price uncertainty (1 = strongly disagree, 7 = strongly agree)
  I have doubts that I will get this kind of price discount if I don’t book now.
  I am worried that I will have to pay a higher price if I don’t book this hotel now.
  I am unsure what prices will be like if I hold off until later to book a hotel room.
  I am uncertain that I will get a price discount like this if I don’t book this hotel now.
Anticipated regret (1 = strongly disagree, 7 = strongly agree)
  If I didn’t book a room at the Independent Hotel right now, I would regret it.
  If I didn’t book a room at the Independent Hotel right now, I would feel upset.
Booking intentions (1 = very low, 7 = very high)
  The probability of me booking this hotel is
  The probability that I would consider booking this hotel is
  The likelihood that I would book this hotel is
Revenue management familiarity (1 = very unfamiliar, 7 = very familiar)
  How familiar are you with the practice of hotels charging different rates depending on
how far in advance rooms are booked?
  How familiar are you with the practice of hotels charging different rates for their rooms
based on how much customer demand there is for the rooms?
Price consciousness (1 = strongly disagree, 7 = strongly agree)
  The money saved by finding low prices is usually worth the time and effort.
  I am willing to go to extra effort to find lower prices.
  The time it takes to find low prices is usually worth the effort.
  I would shop more than one hotel online to find a low price.
Controllability attribution
  The limit on the availability of the advertised discounted rate for the Independent Hotel
is
   (not at all controllable by the hotel/definitely controllable by the hotel)
   (not at all preventable by the hotel/definitely preventable by the hotel)
  How much influence do you think that the Independent Hotel had over the limit on the
availability of the advertised discounted rate
   (no influence at all/complete influence)
Deal proneness (1 = strongly disagree, 7 = strongly agree)
  Taking advantage of promotional deals makes me feel good.
  When I take advantage of promotional deals, I feel that I am getting a good deal.
  Promotional deals have caused me to buy products and/or services that I normally
would not buy.
  I enjoy taking advantage of promotional deals, regardless of the amount I save by
doing so.
  I am more likely to buy brands or patronize service firm that have promotional deals.
  Beyond the money I save, taking advantage of promotional deals gives me a sense of
joy.
 Noone, Lin / SCARCITY-BASED PRICE PROMOTIONS 895

Table 2
Demographic Information

Variable Frequency %

Gender  
 Female 152 59.4
 Male 104 40.6
Age, years  
 18-25 14 5.5
 26-35 47 18.3
 36-45 42 16.4
 46-55 52 20.3
 56-65 50 19.6
  >65 51 19.9
Household income, $  
  <$30,000 39 15.2
 30,000-59,999 84 32.8
 60,000-89,999 61 23.9
  ≥90,000 72 28.1
Education  
  High school or less 30 11.7
  Some college 85 32.8
 College 101 39.5
  Graduate school 40 15.6
Stayed in a hotel for leisure over the past 12 months  
  1-2 times 79 30.9
  3-4 times 93 36.3
  5-6 times 47 18.4
  >6 times 37 14.5
Booked a hotel for leisure trips using online travel  
agent in the past 2 months
  1-2 times 145 56.6
  3-4 times 69 27.0
  5-6 times 26 10.2
  >6 times 16 6.3

condition in Table 3. The cell means for perceived consumer competition did not
vary significantly across the restriction-based price promotion conditions
(Mdemand-driven LQS = 5.04, MLTS = 4.84, F = 1.24, p > .1). Thus, H1Aa was sup-
ported. Furthermore, the cell means for perceived consumer competition indi-
cated that, when booking lead-time was long, participants perceived consumer
competition as significantly higher under both restriction-based (vs. no restric-
tion) price promotions (Mdemand-driven LQS = 5.12 vs. Munrestricted = 4.45, F = 10.45,
p < .005; MLTS = 4.99 vs. Munrestricted = 4.45, F = 6.41, p < .05). The gap in
perceived consumer competition was not significant when booking lead-time
was short (Mdemand-driven LQS = 4.96 vs. Munrestricted = 5.05, F = 0.12, p > .1; MLTS
896   JOURNAL OF HOSPITALITY & TOURISM RESEARCH

Table 3
Means for Perceived Consumer Competition, Perceived Price Uncertainty,
Anticipated Regret, and Booking Intentions by Experimental Conditions

Means

Booking Price Perceived Perceived price Anticipated Booking

lead-time promotion type competition uncertainty regret intentions

Short Unrestricted 5.05 4.99 4.28 6.06

Demand-driven LQS 4.96 4.65 4.15 5.67
LTS 4.68 4.74 3.95 5.47
Long Unrestricted 4.45 4.33 3.64 5.00
Demand-driven LQS 5.12 4.98 3.86 5.41
LTS 4.99 5.01 4.24 5.83

Note: LQS = limited-quantity scarcity; LTS = limited-time scarcity.

= 4.68 vs. Munrestricted = 5.05; F = 2.11, p >.1). These results provide initial sup-
port for H1Ba.
A similar pattern in cell means was observed for perceived price uncertainty.
There were significant difference in perceptions of price uncertainty across
restricted and unrestricted price promotion conditions when booking lead-time
was long (Mdemand-driven LQS = 4.98 vs. Munrestricted = 4.33, F = 8.29, p < .01; MLTS
= 5.01 vs. Munrestricted = 4.33; F = 8.19, p < .01). The gap in perceived price
uncertainty was not significant when lead-time was short (Mdemand-driven LQS =
4.65 vs. Munrestricted = 4.99, F = 2.54, p > .1; MLTS = 4.74 vs. Munrestricted = 4.99,
F = 1.33; p > .1). These results lend support for H2a.
Finally, the patterns in cell means for anticipated regret and booking inten-
tions, mimicking those for perceived consumer competition and perceived price
uncertainty, provided initial support for a mediating effect of anticipated regret
in the relationships of perceived consumer competition and perceived price
uncertainty with booking intentions when booking lead-time is long.
We developed a customized PROCESS model macro in SPSS to formally test
H1B through H5 (Hayes, 2017). This procedure used an ordinary least squares
path analysis to estimate the coefficients in the model in order to determine the
direct effect and indirect effects of scarcity messages and booking lead-time on
booking intentions. We specified a B matrix to reflect the hypothesized mediat-
ing effects of perceived competition, perceived price uncertainty, and antici-
pated regret in the scarcity message type booking intentions relationship;
specified a W matrix to incorporate the hypothesized moderating effect of book-
ing lead-time in the scarcity message type, perceived competition, and perceived
price uncertainty relationships; and included RM familiarity, price conscious-
ness, deal proneness, and attribution for the limited availability of the price pro-
motion as covariates in our analyses. Bootstrapping was implemented in these
analyses to obtain bias-corrected 95% confidence intervals (CIs) for making
 Noone, Lin / SCARCITY-BASED PRICE PROMOTIONS 897

statistical inference about specific and total indirect effects (see Preacher &
Hayes, 2008).
The results of the moderated serial mediation analysis are presented in
Table 4. Note that the unrestricted price promotion was the reference group for
price promotion type, and short lead-time was the reference group for booking
lead-time. First, the results indicated that the interaction effects of price pro-
motion and booking lead-time on perceived consumer competition were sig-
nificant (βdemand-driven LQS = 0.59, CIdemand-driven LQS [0.00, 1.18]; βLTS = 0.86,
CILTS [0.26, 1.45]; see Figure 2). Specifically, when booking lead-time was
long, both a demand-driven LQS-based price promotion and an LTS-based price
promotion drove significantly higher perceptions of consumer competition than
an unrestricted price promotion (Effectdemand-driven LQS = 0.65, CIdemand-driven LQS
[0.23, 1.07], and EffectLTS = 0.49, CILTS [0.07, 0.92], respectively). Conversely,
when booking lead-time was short, the gap in perceived consumer competition
between a demand-driven LQS-based price promotion and an unrestricted
price promotion (Effectdemand-driven LQS = 0.05, CIdemand-driven LQS [−0.36, 0.47])
and the gap between an LTS-based price promotion and an unrestricted price
promotion (EffectLTS = −0.36, CILTS [−0.78, 0.06]) were not significant.
Therefore, H1Ba was supported. The interaction effects of price promotion and
booking lead-time on perceived price uncertainty were significant (βdemand-driven
LQS = 0.91, CIdemand-driven LQS [0.32, 1.50]; βLTS = 0.83, CILTS [0.24, 1.43]; see
Figure 3). Specifically, when booking lead-time was long, both the demand-
driven LQS and LTS promotions yielded higher perceptions of price uncer-
tainty than an unrestricted price promotion (Effectdemand-driven LQS = 0.68,
CIdemand-driven LQS [0.26, 1.10]; and EffectLTS = 0.61, CILTS [0.19, 1.03], respec-
tively). When booking lead-time was short, the gap in perceived price uncer-
tainty between a demand-driven LQS-based price promotion and an
unrestricted price promotion (Effectdemand-driven LQS = −0.23, CIdemand-driven LQS
[−0.65, 0.19]) and the gap between an LTS-based price promotion and an unre-
stricted price promotion (EffectLTS = −0.22, CILTS [−0.64, 0.20]) were not sig-
nificant. Therefore, H2a was supported.
Both perceived competition (β = 0.34, CI [0.21, 0.48) and perceived price
uncertainty (β = 0.45, CI [0.32, 0.58) had a significant, and positive effect on
anticipated regret. Hence, H3a and H4a were supported. Furthermore, antici-
pated regret (β = 0.41, CI [0.28, 0.53]) had a significant, and positive effect on
booking intentions. Hence, H5a was supported. The direct effect of price promo-
tion type on booking intentions was insignificant (βdemand-driven LQS = −0.08,
CIdemand-driven LQS [−0.41, 0.26; βLTS = 0.01, CILTS [−0.33, 0.35). However, the
indirect effects of price promotion type on booking intentions through consumer
competition and anticipated regret, and through perceived price uncertainty and
anticipated regret, were significant when booking lead-time time was long: (1)
price promotion type–perceived consumer competition–anticipated regret–
booking intentions (Effectdemand-driven LQS = 0.09, CIdemand-driven LQS [0.03, 0.17];
EffectLTS = 0.07, CILTS [0.01, 0.15]) and (2) price promotion type–perceived
 Table 4

898
Result of Moderated-Serial Mediation Analysis

Perceived Competition Perceived Price Uncertainty Anticipated Regret Booking Intentions

  Coefficient 95% CI Coefficient 95% CI Coefficient 95% CI Coefficient 95% CI

Constant 1.52* [0.27, 2.77] 3.54*** [2.29, 4.79] −0.78 [–1.92, 0.36] 2.18** [0.78, 3.59]
Demand-driven LQS a 0.05 [−0.36, 0.47] −0.23 [–0.65, 0.19] −0.08 [−0.41, 0.26]
LTS a −0.36 [−0.78, 0.06] −0.22 [−0.64, 0.20] 0.01 [−0.33, 0.35]
Booking lead-time b −0.54* [−0.96, −0.12] −0.61** [−1.03, −0.19]  
Demand-driven LQS × 0.59* [0.00, 1.18] 0.91** [0.32, 1.50]  
Booking lead-time
LTS × Booking lead-time 0.86** [0.26, 1.45] 0.83** [0.24, 1.43]  
Perceived competition 0.34*** [0.21, 0.48]  
Perceived price uncertainty 0.45*** [0.32, 0.58]  
Anticipated regret 0.41*** [0.28, 0.53]
RM familiarity −0.02 [−0.13, 0.08] −0.09 [−0.20, 0.02] −0.02 [−0.11, 0.08] 0.18** [0.06, 0.30]
Price consciousness 0.02 [−0.15, 0.19] −0.01 [−0.19, 0.16] −0.10 [−0.25, 0.04] 0.24* [0.05, 0.43]
Attribution 0.02 [−0.08, 0.12] −0.09 [−0.19, 0.01] 0.05 [−0.04, 0.13] −0.09 [−0.20, 0.02]
Deal Proneness 0.65*** [0.49, 0.80] 0.48*** [0.32, 0.64] 0.28*** [0.12, 0.43] −0.03 [−0.23, 0.17]
R .52 .45 .73 .47
R2 .27 .20 .53 .22
F 10.06 6.86 46.54 10.16
Df 9, 246 9, 246 6, 249 7, 248
P <.0001 <.0001 <.0001 <.0001

Note: RM = revenue management; LQS = limited-quantity scarcity; LTS = limited-time scarcity.

aReference group: unrestricted price promotion. bReference group: short booking lead-time.

*p < .05. **p < .01. ***p < .001.

 Noone, Lin / SCARCITY-BASED PRICE PROMOTIONS 899

Figure 2
Interaction Effect of Price Promotion Type and Booking Lead-Time on Perceived
Competition

Note: LQS = limited-quantity scarcity; LTS = limited-time scarcity.

Figure 3
Interaction Effect of Price Promotion Type and Booking Lead-Time on Perceived
Price Uncertainty

Note: LQS = limited-quantity scarcity; LTS = limited-time scarcity.

price uncertainty–anticipated regret–booking intentions (Effectdemand-driven LQS =

0.13, CIdemand-driven LQS [0.04, 0.24]; EffectLTS = 0.11, CILTS [0.03, 0.23]). These
indirect effects did not hold when booking lead-time was short: (1) price
900   JOURNAL OF HOSPITALITY & TOURISM RESEARCH

promotion type–perceived consumer competition–anticipated regret–booking

intentions (Effectdemand-driven LQS = 0.01, CIdemand-driven LQS [−0.06, 0.07]; EffectLTS
= −0.05, CILTS [−0.14, 0.01]) and (2) price promotion type–perceived price
uncertainty–anticipated regret–booking intentions (Effectdemand-driven LQS = −0.04,
CIdemand-driven LQS [−0.13, 0.04]; EffectLTS = −0.04, CILTS [−0.13, 0.04]). The
indexes of moderated mediation for the indirect effect of price promotion type
through perceived consumer competition and anticipated regret were significant
(Indexdemand-driven LQS = 0.08, CIdemand-driven LQS [0.00, 0.19]; IndexLTS = 0.12, CILTS
[0.03, 0.25]), as were the indexes of moderated mediation for the indirect effect
of price promotion type through perceived price uncertainty and anticipated
regret (Indexdemand-driven LQS = 0.17, CIdemand-driven LQS [0.05, 0.33]; IndexLTS =
0.15, CILTS [0.04, 0.32]). These findings lend support to the indirect effects of
price promotion type on booking intentions through consumer competition and
anticipated regret, and through perceived price uncertainty and anticipated
regret, when booking lead-time time was long.

Discussion

The concept of scarcity has long been studied in the literature (e.g., Jang
et al., 2015; Wu et al., 2012). However, prior research yields little insight into
the relative effects of two types of scarcity, LTS and demand-driven LQS, on
consumers’ reactions to price promotions, their efficacy vis-à-vis unrestricted
price promotions, and the impact of contextual differences on consumers’ reac-
tions to restricted (vs. unrestricted) price promotions. In this research, we sought
to understand the price promotion type–booking intentions relationship, and
potential mediators of that relationship, in the context of two distinct character-
istics of the RM environment: fixed capacity and the application of variable
pricing. We also sought to probe the moderating effect of booking lead-time on
consumers’ reactions to restricted (vs. unrestricted) price promotions.
This study contributes to the extant literature in a number of ways. First, it
examined the role of perceived consumer competition in consumers’ reactions
to restricted and unrestricted price promotions. Because of the fixed capacity
associated with the RM environment, the consumer may perceive competition
for available inventory regardless the type of messaging attached to a price
promotion. The study’s results suggest that even in the absence of explicit
messaging regarding inventory availability, LTS promotions can be as effec-
tive as demand-driven LQS in driving perceived customer competition. While
Aggarwal et al. (2011) argued that consumers do not compete with others for
LTS-based promotions–they just need to buy before the deadline–the finding
of this study is consistent with the notion that reaction to an LTS (vs. a demand-
driven LQS) will be more nuanced in a capacity-constrained environment.
Because an LTS message tends to accelerate purchase, it can, by default,
prompt perceptions of consumer competition for inherently limited inventory.
Furthermore, when examining the differential effects of restricted versus
 Noone, Lin / SCARCITY-BASED PRICE PROMOTIONS 901

unrestricted price promotions on perceived consumer competition, we found

that the price promotion type–perceived consumer competition relationship is
moderated by booking lead-time. Perceived consumer competition ratings
were lower with unrestricted (vs. restricted) price promotions when booking
lead-time was long, with no significant differences in perceived competition
ratings across price promotion conditions when booking lead-time was short.
In line with CLT, these findings lend support to idea that temporal distance
changes consumers’ responses to future events (Trope & Liberman, 2003).
When booking lead-time is long, consumers focus on desirability, rather than
feasibility (Liberman et al., 2007). Thus, in the absence of a restriction to trig-
ger consideration of the feasibility of securing inventory, consumers’ percep-
tions of consumer competition for available inventory are likely to be less
pronounced. In contrast, consumers tend to focus on the feasibility of out-
comes when booking lead-time is short (Trope & Liberman, 2010). Due to the
inherent limit on inventory availability for capacity-constrained services, the
time-pressed consumer, regardless of the presence or absence of a restriction,
is likely to be focused on securing inventory, and this will engender percep-
tions of consumer competition.
Second, this study examined the role of perceived price uncertainty in con-
sumers’ reactions to restricted and unrestricted price promotions. The applica-
tion of variable pricing in an RM environment can lead to significant consumer
uncertainty regarding future prices–whether they will increase, or further
decrease, following a price promotion. This study’s findings suggest that book-
ing lead-time moderates the price promotion type–perceived price uncertainty
relationship. We found no significant differences in perceived price uncertainty
by price promotion type when booking lead-time was short, but perceived price
uncertainty was significantly lower for unrestricted (vs. restricted) price promo-
tions when booking lead-time was long. These findings are in line with the con-
cept of temporal discounting, and its impact on counterfactual thinking (Park &
Jang, 2018). They also support the idea that time-pressured consumers tend to be
more risk averse in gains (Kirchler et al., 2017). In contrast, the absence of time
pressure or urgency can prompt counterfactual thinking that can diminish per-
ceived price uncertainty. This ability to engage in counterfactual thinking fits
with the more cognitive and effortful information processing that an absence of
time pressure facilitates (Mann & Tan, 1993).
Third, supporting the notion that anticipated regret affects consumer decision
making (Zeelenberg et al., 1996), the study’s findings suggest that perceived
consumer competition and perceived price uncertainty are positively related to
anticipated regret, which is, in turn, positively related to booking intentions.
In summary, the study’s results suggest a conditional indirect effect of
price promotion type on booking intentions. When booking lead-time is
short, restricted price promotions do not elicit higher booking intentions
than an unrestricted promotion. Conversely, when booking lead-time is long,
the relationship between price promotion type and booking intentions is
902   JOURNAL OF HOSPITALITY & TOURISM RESEARCH

serially mediated–through consumer competition and anticipated regret, and

through perceived price uncertainty and anticipated regret–with restricted
price promotions ultimately driving higher booking intentions than unre-
stricted promotions.
Given that price promotions typically form an important component of RM
strategy for capacity-constrained service firms, it behooves service managers to
understand the conditions under which price promotions are likely to be most
effective. The findings of this study suggest that it may not be necessary to
attach a restriction (LTS or demand-driven LQS) to a price promotion when
booking lead-time is short. An unrestricted price promotion is likely to be
equally effective in prompting purchase. The absence of restriction messaging
can also reduce information overload, which can negatively affect decision mak-
ing and consumers’ satisfaction with their decisions (Ghose et al., 2014).
The study’s results suggest that service firms should apply restrictions on
price promotions when booking lead-time is long. They will be more effective
than an unrestricted price promotion in driving perceptions of consumer compe-
tition for available inventory and perceptions of price uncertainty, both of which
will positively influence anticipated regret and intimately booking intentions.
While the study’s results indicated that both types of restriction, LTS and
demand-driven LQS, can be equally effective in influencing consumers’ book-
ing intentions when booking lead-time is long, it should be noted that the
demand-driven LQS (i.e., 3 rooms left), and the LTS (i.e., Today only) condi-
tions that were examined in this study were determined as equivalent in potency
based on a pretest of the study’s stimuli. Thus, if a firm intends to employ a
restrictions-based price promotion outside of the conditions tested in this study,
some experimentation to determine the relative effectiveness of the restrictions
being considered is merited. Finally, firms need to exercise caution in terms of
the frequency with which they attach restrictions to price promotions. The
greater the frequency with which restricted price promotions are offered, the
more likely their efficacy will be diluted as consumers begin to question the
believability of the scarcity messaging.

Limitations and Further Research

There are a number of limitations to this study that should be considered in

future research. First, this study was conducted in a single service context, so
further testing of relationships of interest in other capacity-constrained service
contexts (e.g., airlines or entertainment venues) is merited to ensure the general-
izability of the study’s findings to other RM environments. On a related note, we
employed a controlled, survey-based experiment in this research because it
allowed us to examine the relationships of interest while holding other factors
constant (Calder et al., 1981). A field experiment is merited to test the effects of
different levels of restrictions, and booking lead-times, on actual booking behav-
ior. Finally, we examined the moderating role of booking lead-time in the price
 Noone, Lin / SCARCITY-BASED PRICE PROMOTIONS 903

promotion type–booking intentions relationship. The impact of other potential

moderators of this relationship such as brand loyalty and/or familiarity and pro-
motion frequency could be examined in future studies.

Concluding Summary

To date, research on consumer reaction to scarcity-based price promo-

tions has been largely confined to the study of consumer goods. Additionally,
the literature yields little insight into the relative effects of two specific types
of scarcity–LTS, and demand-driven LQS-on consumer reaction to price
promotions. In this research, we focused on the efficacy of LTS and demand-
driven LQS price promotions in the context of services, specifically those to
which RM is applied. We proposed that two key characteristics of the RM
environment–fixed capacity and the application of variable-based pricing–
may influence how consumers respond to these two types of scarcity-based
price promotions. We also suggested that booking lead-time may influence
consumers’ reactions to such promotions. The results of this study indicated
that when booking lead-time was long, both LTS and demand-driven LQS
price promotions had a positive impact on consumers’ perceptions of compe-
tition and price uncertainty. Both perceived competition and perceived price
uncertainty had a positive impact on anticipated regret, which in turn had a
positive influence on consumers’ booking intentions. Conversely, when
booking lead-time was short, neither type of scarcity-based price promotion
(LTS and demand-driven LQS) was more effective than an unrestricted price
promotion in stimulating booking intentions. These findings suggest that
operators within an RM environment should focus on applying restrictions
to price promotions when booking lead-time is long. They are likely to be
ineffective in stimulating demand, over and above that provided by an unre-
stricted price discount, when booking lead-time is short.

ORCID iDs
Breffni M. Noone https://orcid.org/0000-0001-6992-236X
Michael S. Lin https://orcid.org/0000-0001-5335-322X

SUPPLEMENTAL MATERIAL
Supplemental material for this article is available online.

References
Aggarwal, P., Jun, S. Y., & Huh, J. H. (2011). Scarcity messages. Journal of Advertising,
40(3), 19-30. https://doi.org/10.2753/JOA0091-3367400302
Aggarwal, P., & Vaidyanathan, R. (2003). Use it or lose it: purchase acceleration effects
of time-limited promotions. Journal of Consumer Behaviour, 2(4), 393-403. https://
doi.org/10.1002/cb.116
904   JOURNAL OF HOSPITALITY & TOURISM RESEARCH

Ainslie, G., & Haslam, N. (1992). Hyperbolic discounting. In G. Loewenstein & J. Elster
(Eds.), Choice over time (pp. 57-92). Russell Sage Foundation.
Alba, J. W., & Hutchinson, J. W. (1987). Dimensions of consumer expertise. Journal of
Consumer Research, 13(4), 411-454. https://doi.org/10.1086/209080
Angeletos, G. M., Laibson, D., Repetto, A., Tobacman, J., & Weinberg, S. (2001). The
hyperbolic consumption model: Calibration, simulation, and empirical evaluation.
Journal of Economic Perspectives, 15(3), 47-68. https://doi.org/10.1257/jep.15.3.47
Betancourt, H. (1990). An attribution-empathy model of helping behavior: Behavioral
intentions and judgments of help-giving. Personality and Social Psychology Bulletin,
16(3), 573-591. https://doi.org/10.1177/0146167290163015
Brucks, M. (1985). The effects of product class knowledge on information search behav-
ior. Journal of Consumer Research, 12(1), 1-16. https://doi.org/10.1086/209031
Calder, B. J., Phillips, L. W., & Tybout, A. M. (1981). Designing research for applica-
tion. Journal of Consumer Research, 8(2), 197-207. https://doi.org/10.1086/208856
Campo, K., Gijsbrechts, E., & Nisol, P. (2004). Dynamics in consumer response to prod-
uct unavailability: Do stock-out reactions signal response to permanent assortment
reductions? Journal of Business Research, 57(8), 834-843. https://doi.org/10.1016/
S0148-2963(02)00486-1
Carroll, W. J., & Grimes, R. C. (1995). Evolutionary change in product manage-
ment: Experiences in the car rental industry. Interfaces, 25(5), 84-104. https://doi.
org/10.1287/inte.25.5.84
Cialdini, R. B. (2008). Influence: Science and practice (5th ed.). Pearson Education.
Dickson, P. R., & Sawyer, A. G. (1990). The price knowledge and search of super-
market shoppers. Journal of Marketing, 54(3), 42-53. https://doi.org/10.1177/0022
24299005400304
Eisend, M. (2008). Explaining the impact of scarcity appeals in advertising: The mediat-
ing role of perceptions of susceptibility. Journal of Advertising, 37(3), 33-40. https://
doi.org/10.2753/JOA0091-3367370303
Ghose, A., Ipeirotis, P. G., & Li, B. (2014). Examining the impact of ranking on con-
sumer behavior and search engine revenue. Management Science, 60(7), 1632-1654.
https://doi.org/10.1287/mnsc.2013.1828
Gierl, H., & Huettl, V. (2010). Are scarce products always more attractive? The inter-
action of different types of scarcity signals with products’ suitability for conspicu-
ous consumption. International Journal of Research in Marketing, 27(3), 225-235.
https://doi.org/10.1016/j.ijresmar.2010.02.002
Gierl, H., Plantsch, M., & Schweidler, J. (2008). Scarcity effects on sales volume in
retail. International Review of Retail, Distribution and Consumer Research, 18(1),
45-61. https://doi.org/10.1080/09593960701778077
Gupta, S., & Cooper, L. G. (1992). The discounting of discounts and promotion thresh-
olds. Journal of Consumer Research, 19(3), 401-411. https://doi.org/10.1086/209310
Hackleman, E. C., & Duker, J. M. (1980). Deal proneness and heavy usage: Merging
two market segmentation criteria. Journal of the Academy of Marketing Science, 8(4),
332-344. https://doi.org/10.1007/BF02721930
Hayes, A. F. (2017). Introduction to mediation, moderation, and conditional process
analysis: A regression-based approach. Guilford.
Hess, R. L., Jr., Ganesan, S., & Klein, N. M. (2003). Service failure and recovery: The
impact of relationship factors on customer satisfaction. Journal of the Academy of
Marketing Science, 31(2), 127-145. https://doi.org/10.1177/0092070302250898
 Noone, Lin / SCARCITY-BASED PRICE PROMOTIONS 905

Homburg, C., Klarmann, M., & Staritz, S. (2012). Customer uncertainty following
downsizing: The effects of extent of downsizing and open communication. Journal of
Marketing, 76(3), 112-130. https://doi.org/10.1509/jm.09.0486
Inman, J. J., Peter, A. C., & Raghubir, P. (1997). Framing the deal: The role of restric-
tions in accentuating deal value. Journal of Consumer Research, 24(1), 68-79. https://
doi.org/10.1086/209494
Jang, W. E., Ko, Y. J., Morris, J. D., & Chang, Y. (2015). Scarcity message effects
on consumption behavior: Limited edition product considerations. Psychology &
Marketing, 32(10), 989-1001. https://doi.org/10.1002/mar.20836
Jiang, B., Narasimhan, C., & Turut, Ö. (2016). Anticipated regret and product innovation.
Management Science, 63(12), 4308-4323. https://doi.org/10.13140/RG.2.1.4220.7444
Kahneman, D. (2011). Thinking, fast and slow. Macmillan.
Kim, Y. J., Njite, D., & Hancer, M. (2013). Anticipated emotion in consumers’ inten-
tions to select eco-friendly restaurants: Augmenting the theory of planned behav-
ior. International Journal of Hospitality Management, 34, 255-262. https://doi.
org/10.1016/j.ijhm.2013.04.004
Kimes, S. E., Chase, R. B., Choi, S., Lee, P. Y., & Ngonzi, E. N. (1998). Restaurant
revenue management: Applying yield management to the restaurant industry.
Cornell Hotel and Restaurant Administration Quarterly, 39(3), 32-39. https://doi.
org/10.1177/001088049803900308
Kimes, S. E., & Schruben, L. W. (2002). Golf course revenue management: A study
of tee time intervals. Journal of Revenue and Pricing Management, 1(2), 111-120.
https://doi.org/10.1057/palgrave.rpm.5170014
Kirchler, M., Andersson, D., Bonn, C., Johannesson, M., Sørensen, E. Ø., Stefan, M.,
Tinghög, G., & Västfjäll, D. (2017). The effect of fast and slow decisions on risk tak-
ing. Journal of Risk and Uncertainty, 54(1), 37-59. https://doi.org/10.1007/s11166-
017-9252-4
Knobloch, L. K., Satterlee, K. L., & DiDomenico, S. M. (2010). Relational uncertainty
predicting appraisals of face threat in courtship: Integrating uncertainty reduction
theory and politeness theory. Communication Research, 37(3), 303-334. https://doi.
org/10.1177/0093650210362527
Kruglanski, A. W., & Webster, D. M. (1991). Group members’ reactions to opinion
deviates and conformists at varying degrees of proximity to decision deadline and of
environmental noise. Journal of Personality and Social Psychology, 61(2), 212-225.
https://doi.org/10.1037//0022-3514.61.2.212
Ku, H. H., Kuo, C. C., & Kuo, T. W. (2012). The effect of scarcity on the purchase inten-
tions of prevention and promotion motivated consumers. Psychology & Marketing,
29(8), 541-548. https://doi.org/10.1002/mar.20541
Lee, S. Y., & Seidle, R. (2012). Narcissists as consumers: The effects of perceived scar-
city on processing of product information. Social Behavior and Personality, 40(9),
1485-1499. https://doi.org/10.2224/sbp.2012.40.9.1485
Lemieux, J., & Peterson, R. A. (2011). Purchase deadline as a moderator of the effects of
price uncertainty on search duration. Journal of Economic Psychology, 32(1), 33-44.
https://doi.org/10.1016/j.joep.2010.10.005
Liberman, N., Trope, Y., & Wakslak, C. (2007). Construal level theory and consumer
behavior. Journal of Consumer Psychology, 17(2), 113-117. https://doi.org/10.1016/
S1057-7408(07)70017-7
906   JOURNAL OF HOSPITALITY & TOURISM RESEARCH

Lichtenstein, D. R., Ridgway, N. M., & Netemeyer, R. G. (1993). Price perceptions and
consumer shopping behavior: A field study. Journal of Marketing Research, 30(2),
234-245. https://doi.org/10.1177/002224379303000208
Mann, L., & Tan, C. (1993). The hassled decision maker: The effects of perceived
time pressure on information processing in decision making. Australian Journal of
Management, 18(2), 197-209. https://doi.org/10.1177/031289629301800204
Maxwell, S. (2002). Rule-based price fairness and its effect on willingness to purchase.
Journal of Economic Psychology, 23(2), 191-212. https://doi.org/10.1016/S0167-
4870(02)00063-6
Mazumdar, T., & Monroe, K. B. (1992). Effects of inter-store and in-store price compari-
sons on price recall accuracy and confidence. Journal of Retailing, 68(1), 66.
Mehta, N., Rajiv, S., & Srinivasan, K. (2003). Price uncertainty and consumer search:
A structural model of consideration set formation. Marketing Science, 22(1), 58-84.
https://doi.org/10.1287/mksc.22.1.58.12849
Milliken, F. J. (1987). Three types of perceived uncertainty about the environment: State,
effect, and response uncertainty. Academy of Management Review, 12(1), 133-143.
https://doi.org/10.2307/257999
Mischel, W., & Staub, E. (1965). Effects of expectancy on working and waiting for larger
reward. Journal of Personality and Social Psychology, 2(5), 625-633. https://doi.
org/10.1037/h0022677
Noone, B. M., & Maier, T. A. (2015). A decision framework for restaurant revenue man-
agement. Journal of Revenue and Pricing Management, 14(4), 231-244. https://doi.
org/10.1057/rpm.2015.15
Palazón, M., & Delgado, E. (2009). The moderating role of price consciousness on the
effectiveness of price discounts and premium promotions. Journal of Product &
Brand Management, 18(4), 306-312. https://doi.org/10.1108/10610420910972837
Park, J. Y., & Jang, S. (2018). Did I get the best discount? Counterfactual think-
ing of tourism products. Journal of Travel Research, 57(1), 17-30. https://doi.
org/10.1177/0047287516680775
Pham, N. Q., & Lopez, J. C. (2017). Scarcity as a marketing instrument: the roles of
goal frames and perceived consumer competition [Unpublished master’s thesis]. BI
Norwegian Business School.
Preacher, K. J., & Hayes, A. F. (2008). Asymptotic and resampling strategies for assess-
ing and comparing indirect effects in multiple mediator models. Behavior Research
Methods, 40(3), 879-891. https://doi.org/10.3758%2FBRM.40.3.879
Roese, N. J. (1997). Counterfactual thinking. Psychological Bulletin, 121(1), 133-148.
https://doi.org/10.1037/0033-2909.121.1.133
Song, M., Noone, B. M., & Han, R. J. (2019). An examination of the role of booking
time in consumers’ reactions to online scarcity messages. International Journal of
Hospitality Management, 77, 483-491. https://doi.org/10.1016/j.ijhm.2018.08.012
Strotz, R. H. (1955). Myopia and inconsistency in dynamic utility maximization. Review
of Economic Studies, 23(3), 165-180. https://doi.org/10.2307/2295722
Suri, R., Kohli, C., & Monroe, K. B. (2007). The effects of perceived scarcity on consum-
ers’ processing of price information. Journal of the Academy of Marketing Science,
35(1), 89-100. https://doi.org/10.1007/s11747-006-0008-y
Tewari, J. K. (2014). Price change strategies over time-using dramatic major changes
versus smaller incremental changes. Journal of Behavioral Studies in Business, 8.
https://www.aabri.com/manuscripts/141983.pdf
 Noone, Lin / SCARCITY-BASED PRICE PROMOTIONS 907

Thaler, R. (1981). Some empirical evidence on dynamic inconsistency. Economics

Letters, 8(3), 201-207. https://doi.org/10.1016/0165-1765(81)90067-7
Thaler, R. (1983). Transaction utility theory. In R. P. Bagozzi & A. M. Tybout (Eds.),
NA—Advances in consumer research (Vol. 10, pp. 229-232). Association for
Consumer Research.
Trope, Y., & Liberman, N. (2003). Temporal construal. Psychological Review, 110(3),
403-421. https://doi.org/10.1037/0033-295X.110.3.403
Trope, Y., & Liberman, N. (2010). Construal-level theory of psychological distance.
Psychological Review, 117(2), 440-463. https://doi.org/10.1037/a0018963
Tsiros, M., & Mittal, V. (2000). Regret: A model of its antecedents and consequences in
consumer decision making. Journal of Consumer Research, 26(4), 401-417. https://
doi.org/10.1086/209571
Wansink, B., Shimizu, M., Cardello, A. V., & Wright, A. O. (2012). Dining in the dark:
How uncertainty influences food acceptance in the absence of light. Food Quality and
Preference, 24(1), 209-212. https://doi.org/10.1016/j.foodqual.2011.09.002
Winer, R. S. (1989). A multi-stage model of choice incorporating reference prices.
Marketing Letters, 1(1), 27-36. https://doi.org/10.1007/BF00436146
Wirtz, J., & Chew, P. (2002). The effects of incentives, deal proneness, satisfaction and
tie strength on word-of-mouth behaviour. International Journal of Service Industry
Management, 13(2), 141-162. https://doi.org/10.1108/09564230210425340
Wirtz, J., & Kimes, S. E. (2007). The moderating role of familiarity in fairness percep-
tions of revenue management pricing. Journal of Service Research, 9(3), 229-240.
https://doi.org/10.1177/1094670506295848
Wu, W. Y., Lu, H. Y., Wu, Y. Y., & Fu, C. S. (2012). The effects of product scarcity
and consumers’ need for uniqueness on purchase intention. International Journal of
Consumer Studies, 36(3), 263-274. https://doi.org/10.1111/j.1470-6431.2011.01000.x
Zeelenberg, M. (1999). Anticipated regret, expected feedback and behavioral deci-
sion making. Journal of Behavioral Decision Making, 12(2), 93-106. https://doi.
org/10.1002/(SICI)1099-0771(199906)12:2%3C93::AID-BDM311%3E3.0.CO;2-S
Zeelenberg, M., Beattie, J., Van der Pligt, J., & De Vries, N. K. (1996). Consequences
of regret aversion: Effects of expected feedback on risky decision making.
Organizational Behavior and Human Decision Processes, 65(2), 148-158. https://
doi.org/10.1006/obhd.1996.0013
Zeithaml, V. A. (1982). Consumer response to in-store price information environments.
Journal of Consumer Research, 8(4), 357-369. https://doi.org/10.1086/208876

Submitted February 1, 2020

Accepted February 29, 2020
Refereed Anonymously

Breffni M. Noone is an associate professor at the Pennsylvania State University School

of Hospitality Management. Michael S. Lin is a doctoral candidate at the Pennsylvania
State University School of Hospitality Management.