Outlet stores frequently advertise huge discounts off base prices. Although nobody actually pays the base price, the large discount may convince consumers that they are getting a good deal. The outlet stores are using the high base prices as a form of:

Question

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The outlet stores are using the high base prices as a form of anchoring. This psychological pricing strategy involves setting a reference point (the high base price) that consumers use as an anchor, making the discounted price seem like a much better deal in comparison.

Outlet Stores Frequently Advertise Huge Discounts Off Base Prices