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Other Paper
| 2009
What Happens When Deals Interfere with Preferences?
by
Ray Weaver
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Abstract
The idea that consumers are affected by what they perceive to be good or bad deals has both intuitive appeal and empirical support. Previous research has shown that this transaction utility can influence willingness to pay, compensation demanded, and brand choice. These findings suggest an intriguing possibility: Can transaction utility interfere with “real” preferences so thoroughly that consumers simultaneously choose one good but pay or demand more for a different one? We find that it can. We rule out anchoring and response mode compatibility as alternative explanations for our results, and show that an aversion to bad deals has greater influence than an attraction to good deals. Because transaction prices are highly sensitive to even arbitrary suggested reference prices, and non-transactional measures are remarkably insensitive to them, we argue that concerns about the merits of he deal distort rather than reflect true preferences.
Keywords: Price;
Spending;
Brands and Branding;
Demand and Consumers;
Market Transactions;
Power and Influence;