When Do Higher Prices Increase Demand? The Dual Role of Price in Consumers\u27 Value Judgments

Drawing on literature on judgment and decision-making, we examine the proposition that price serves two distinct roles in consumers\u27 value judgments. First, as a product attribtute, price affects the perceived similarity of the target product to the mental prototype of a higher or lower quality product. However, price is not the only attribute used to make similarity based quality judgments. Other relevant and available product attributes moderate the effect of price on quality judgments. Second, as a measure of sacrifice, price serves as the benchmark for comparing utility gains from superior product quality. However, this comparison process is dynamic because the relative importance of money and product quality changes across consumption occasions. We present a signal detection model of consumer\u27s price-value judgment to explain how high prices simultaneously increase as well as decrease purchase intentions. We describe how managers can use this model of value judgment to identify situations when higher price may increase demand

Knowledge creation in consumer research: Multiple routes, multiple criteria

The modal scientific approach in consumer research is to deduce hypotheses from existing theory about relationships between theoretic constructs, test those relationships experimentally, and then show â processâ evidence via moderation and mediation. This approach has its advantages, but other styles of research also have much to offer. We distinguish among alternative research styles in terms of their philosophical orientation (theoryâ driven vs. phenomenonâ driven) and their intended contribution (understanding a substantive phenomenon vs. building or expanding theory). Our basic premise is that authors who deviate from the dominant paradigm are hindered by reviewers who apply an unvarying set of evaluative criteria. We discuss the merits of different styles of research and suggest appropriate evaluative criteria for each.Peer Reviewedhttps://deepblue.lib.umich.edu/bitstream/2027.42/141497/1/jcpy473.pd

When Does the Past Repeat Itself? The Interplay of Behavior Prediction and Personal Norms

Does asking people about their future behavior increase or decrease the likelihood that they will repeat their past behavior? In two laboratory and two field experiments, we find that behavior prediction strengthens behavior repetition, making people more likely to do what they normally do, when personal norms regarding engaging in a behavior are weak or not easily accessible. However, when personal norms are strong or made accessible at the time of the prediction request, behavior prediction weakens behavior repetition and increases the likelihood that people do what they think they should do-even if it's not what they normally would do. These findings provide new tools for influencing behavior repetition, reconcile some seemingly contradictory past findings, and contribute to the debate regarding the relative importance of habits and intentions in guiding behavior. T he repetition of unhealthy behaviors (such as overeating) and the lack of repetition of healthy behaviors (such as exercising) are leading contributors to preventable deaths in developed countrie

Choice in Computer-Mediated Environments

In the last several years, the increased diffusion of computer andtelecommunications technologies in businesses and homes has produced newways for organizations to connect with their customers. These computermediated environments (CMEs) such as the World Wide Web raise new researchquestions. In this paper, we examine the potential research issuesassociated with CMEs in five areas: (1) decision processes, (2) advertisingand communications, (3) brand choice, (4) brand communities, and (5)pricing.Peer Reviewedhttp://deepblue.lib.umich.edu/bitstream/2027.42/47229/1/11002_2004_Article_138117.pd

Advertising Bans and the Substitutability of Online and Offline Advertising

The authors examine whether the growth of the Internet has reduced the effectiveness of government regulation of advertising. They combine nonexperimental variation in local regulation of offline alcohol advertising with data from field tests that randomized exposure to online advertising for 275 different online advertising campaigns to 61,580 people. The results show that people are 8% less likely to say that they will purchase an alcoholic beverage in states that have alcohol advertising bans compared with states that do not. For consumers exposed to online advertising, this gap narrows to 3%. There are similar effects for four changes in local offline alcohol advertising restrictions when advertising effectiveness is observed both before and after the change. The effect of online advertising is disproportionately high for new products and for products with low awareness in places that have bans. This suggests that online advertising could reduce the effectiveness of attempts to regulate offline advertising channels because online advertising substitutes for (rather than complements) offline advertising.Google (Firm)WPP (Firm

The link between purchase intentions and purchase behavior: Predicting across individuals and over time

The process by which purchase intentions are translated into purchase behavior across individuals, and by which intentions and purchases evolve over time is rich. There are still may aspects of the process for which we do not have a complete understanding. A set of key issues concerning the relationship between consumers\u27 stated purchase intent and their subsequent purchase behavior will be examined in this dissertation. Based on behavioral theory, these key issues will be examined using a mix of stochastic modeling and empirical analyses. Two large multi-wave panel data sets containing intention and purchase information about two different durable goods will be used to investigate the research objectives and calibrate and validate the models. The research will provide improved methodologies for predicting purchase over time, given consumers stated purchase intent. In particular, models will be developed to determine (1) how may individuals will buy, (2) which individuals will buy, (3) when individuals will buy, and (4) how individuals\u27 intentions change over time. The research results will lead to a improved understanding of how intentions and behavior evolve over time and what factors may moderate the relationship between intent and behavior. In particular the research will provide insights about the impact of characteristics of the individual, the effect of intent measurement, and the effect of time perception on the link between stated intent and behavior. Finally, this will be the first research to explore the dynamics of purchase intent and purchase behavior

The Effect of Exposure to Narrow Versus Broad Categorizations on Subsequent Decision Making

Exposure to broad versus narrow categorizations in an initial task significantly alters consumers' information processing styles, which in turn changes their categorizing and purchasing behavior in subsequent and unrelated tasks, ranging from basic cognitive behaviors (e.g., grouping), and consumer decisions (e.g., new product adoptions), to more general decision-making strategies (e.g., susceptibility to heuristics). Previous exposure to a broadly categorized context instigates a more lenient processing orientation and greater susceptibility to context effects and decision heuristics. In contrast, previous exposure to a narrowly categorized context instigates a careful processing orientation, leading to decisions that are invariable across contexts