Exxon has asked for your advice about a research study to test consumer response to cash discounts. Specifically, Exxon has decided to test the effects of a 5% discount on cash purchases of gasoline. The test will be conducted at all Exxon stations in Pigeon Forge, Tennessee and Columbia, South Carolina. These stations will offer a 5% cash discount for six months. Sales (both cash and credit card) will be monitored before the discount is offered, and also while it is offered. If the results are favorable, the discounts will be introduced nationwide.

a. What is the independent variable?

b. What is the dependent variable?

c. Is this a lab or field experiment?

d. What are some potential extraneous variables that need to be controlled for?

e. Discuss whether this study would have higher internal or external validity and why.