This dissertation investigated the effects of price and various forms of discounts on buyers' subjective evaluations of products. The role that price plays in product evaluations was examined from both the economic and behavioral perspectives, and a conceptualization derived from these two perspectives was reviewed. This original price-perceived quality conceptualization was extended using transaction utility theory. Based on the extended price-perceived quality model, hypotheses were developed to posit the relationships that the extrinsic cues of price and forms of discounts have with the constructs of perceived quality, perceived sacrifice, perceived value, willingness to buy, acquisition value, transaction value, and redemption effort. Also, the relationship among these constructs as posited by the extended conceptualization was examined.

The research was conducted in three phases. The first phase determined the product and price levels to be used in the final stage of the research; the second phase checked the reliability of the indicators to be used in the final stage of the research; and, in the final phase, a 4 x 4 between subjects design was used to test the research hypotheses. PACKAGE was used to test the reliability of the indicators for each construct in both the pretest and fmla data collection stages. The analysis for the experiment incorporated ANOVA, Duncan's multiple comparisons, trend analysis, and LISREL to test the significance of the proposed relationships.

In general, the analysis provided good support for the hypothesized effects. The principal exceptions being the posited relationships of perceived quality and perceived value with the independent variable forms of discounts. Also, the relationships of several of the dependent variables with transaction value were weak leading to speculation of the role that transaction value has in buyers' subjective product evaluations. Finally, the major findings of the research were discussed with respect to the theoretical, methodological, and managerial significance. Limitations and directions for future research were also discussed.