A study by the University of Chicago and MIT found that customers thought it was more difficult to judge the quality of a product when it was discounted. "People think, 'If I'm getting something at a discount, that means it's not as good, " said study co-author Efrem Benmelech to The New York Times.
When you reduce your price, people assume that it's because your product is of lower quality. This is because people typically associate low prices with low-quality products and vice versa. There may be a strong reason for lowering your prices, such as below-market costs or a sudden surplus in supply, in spite of this, consumers will likely respond negatively to the reduction.
This phenomenon generally occurs when consumers have little information about what they're buying - which is often the case online where purchasing decisions are often made quickly and without much consideration. However, when you offer a larger variety of products for a variety of prices, people are more likely to buy from you.
You must be smart in pricing your products/ services.
