The concept, called “steadily decreasing discounting” or SDD, by researchaers, entails discounting in a manner to keep the consumers attracted to the offerings.
Either keep on reducing prices, adding promotions to your offerings, to keep the consumers engaged (leveraging the transactional utility) or once reduced significantly, raise prices with one/two intermittent break – to create a sense of urgency that prices are going to be raised shortly.
Net net, Higher future price expectations and greater anticipation of inaction-regret appear to be the underlying mechanisms that lead to the effectiveness of the SDD tactic. Read the article and the research to get more details.
Photo Ref: Tollipop