Earlier quoted context omitted.
Because people like the feeling of getting a discount. I don't know why, but it satisfies some part of their ego. Discounts don't change the utility of the product or the budget of the buyer or anything, other than the buyer feeling good about themself.
You are way overcomplicating it. People are not talking about comparing the discounted price with some fictional “intrinsic utility” price and your comments about the utility of the item are tone deaf and missing the point. Advertising that you are selling something at a discount is information that your price might be lower than a competitor. Nobody likes getting a discount at store A then seeing the same item for l…
It’s not a seller’s job to make sure the buyer is getting the lowest price. It’s not possible for a seller to know every single other seller’s price so I don’t see how anyone has a reasonable expectation to that in the first place.
People like to THINK they are getting a discount. They don’t care that the actually are. Clear evidence is JCPenney trying to offer people the best price without discounts:
https://www.priceintelligently.com/blog/bid/152018/lessons-f...
It’s how Kohl’s and Bed Bath And Beyond survive. Consumers rewarded sellers that offer 80% off ridiculously marked up items versus JC Penney who tried to offer an “honest” market price, and they forced JC Penney to engage in “deceptive” sale pricing again.