Today is the Western Black Friday, when many retailers tend to provide discounts and boost their revenues on the day. Earlier this month, the China's Singles Day finished with a total consumption of 17.8 billion dollars, set another history.
When we compare the total consumption year from year, if we can see an increase in consumption, we may come to a conclusion that there is an increase in the entire population's consumption power; if we see a decrease in consumption, we may consider the population's consumption has decreased or we may think that some proportion of the middle class become more wealthier and busier that it is not worth buying goods and services on a specific day, especially on a working day.
There is always some news covering how these retailers cheat on their customers without actually reducing the prices; however, we have never seen that the consumption is ever significantly affected by this kind of negative news. This shows either customers are not sensible about the prices they consume or the majority of the prices actually decreases.
Why do people love to consumer far more than usual on these special shopping events? Of course, the discounts are very attractive and many people buy more based on their excitement about the sharp discounts. On the China's Single Day, the rate of the increase in people's consumption was greater than the average discount rate, which means the preferences of many Chinese people treat the price differences after the discounts greater than the actual price differences, then they have a convex preference curve towards discounts.
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