Klaus Wertenbroch

Consumer Choice Between Hedonic and Utilitarian Goods

In this article, the authors examine how consumer choice between hedonic and utilitarian goods is influenced by the nature of the decision task. Building on research on elaboration, the authors propose that the relative salience of hedonic dimensions is greater when consumers decide which of several items to give up (forfeiture choices) than when they decide which item to acquire (acquisition choices). The resulting hypothesis that a hedonic item is relatively preferred over the same utilitarian item in forfeiture choices than in acquisition choices was supported in two choice experiments. In a subsequent experiment, these findings were extended to hypothetical choices in which the acquisition and forfeiture conditions were created by manipulating initial attribute-level reference states instead of ownership. Finally, consistent with the experimental findings, a field survey showed that, relative to market prices, owners of relatively hedonic cars value their vehicles more than do owners of relatively utilitarian cars. The authors discuss theoretical implications of these reference-dependent preference asymmetries and explore consequences for marketing managers and other decision makers.

Option Attachment: When Deliberating Makes Choosing Feel Like Losing

A belt transporting device includes a belt; first and second adjustment members provided at two respective ends of a tension roller in a belt width direction orthogonal to a direction of rotation of the belt, the first and second adjustment members each being movable by receiving a force from the belt; and a link member that interlocks the movement of the first adjustment member and the movement of the second adjustment member. If the belt is laterally shifted in the belt width direction, one of the first and second adjustment members moves by receiving a force from the belt while the other is moved by the link member such that the tension roller is tilted with respect to a driving roller.

Consumer Control and Empowerment: A Primer

This paper introduces consumer empowerment as a promising research area. Going beyond lay wisdom that more control is always better, we outline several hypotheses concerning (a) the factors that influence the perception of empowerment, and (b) the consequences of greater control and the subjective experience of empowerment on consumer satisfaction and confidence.

When do losses loom larger than gains

In defining limits to loss aversion, Novemsky and Kahneman (2005) offer important new data and a needed summary of appropriate ways to think about loss aversion. In this comment to Novemsky and Kahnemans article, the authors consider the new empirical results that involve probabilistic buying and selling, suggesting caution in generalizing the results to nonprobabilistic commerce. The authors expand Novemsky and Kahnemans summary by exploring two critical constructs that help define the boundaries of loss aversion: emotional attachment and cognitive perspective. Emotional attachment alters loss aversion by moderating the degree to which parting with an item involves a loss, whereas shifts in cognitive perspective explain why items typically viewed as a loss are given more or less weight. The goal is to use these constructs to characterize more specifically contexts in which losses loom larger than gains and to suggest specific ways that research into loss aversion could evolve.

On the Perceived Value of Money: The Reference Dependence of Currency Numerosity Effects

Money illusion research shows that the nominal (face) value of money affects consumer perceptions of its real value. Recent mixed findings on consumer valuations in different currencies suggest that the underlying anchoring and adjustment processes are complex. We develop a framework to identify boundary conditions that specify the direction of anchoring effects on valuations in different currencies. Consumers anchor on the numerosity of the nominal difference between prices and salient referents (e.g., budgets) when evaluating transactions. Support for our framework comes from a series of experiments that evoke different reference standards. We discuss implications and opportunities for future research.

A behavioral decision theory perspective on hedonic and utilitarian choice

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Self-Signaling and the Costs and Benefits of Temptation in Consumer Choice

The literature on self-control emphasizes that temptation is costly. The authors propose that temptation entails not only costs but also benefits for consumers. These arise from self-signaling effects of how consumers handle tempting choice options. Succumbing to temptation is a (costly) self-signal of weak willpower, whereas resisting temptation is a (beneficial) self-signal of strong willpower. Five experiments demonstrate that these self-signaling costs and benefits of temptation depend not only on the chosen item but also on the temptation from the nonchosen options. The authors discuss theoretical implications of their findings for research on impulsive choice and self-control and on self-signaling and managerial implications for pricing and assortment strategies.

Indeterminacy and Live Television

Why would consumers prefer live television, even when tape-delayed broadcasts provide the same sensory experience? We propose that indeterminacy is a key reason. Indeterminate consumption experiences (such as watching sports competitions live on television) unfold in ways that are not decided ex ante. This makes them more exciting than equivalent determinate experiences (such as watching recorded broadcasts). We offer empirical evidence for this proposition: independently of other differences between live and taped broadcasts, the indeterminacy of events made watching them live more exciting and correspondingly preferable. We conclude by discussing implications of the indeterminacy concept for consumer research.

Currency Numerosity Effects on the Perceived Value of Transactions

This paper examines the impact of currency numerosity on consumer perceptions of the value of transactions. It extends current theorizing on money illusion in several important ways. We propose a conceptualization that not only considers the nominal prices faced by consumers but, in line with economic and psychophysical theory, also considers the effect of relevant reference standards of evaluation (e.g., a consumers income or budget). Second, we suggest that consumers rely on the numerosity heuristic in evaluating prices relative to income. Third, we propose and test two alternative computational mechanisms for this evaluation process, the difference between income and prices and the ratio between the two. Our conceptualization not only accounts for recent findings on effects of nominal variations in prices but, in addition, predicts new and reverse effects when both incomes and prices are uniformly rescaled in a new currency. We test our propositions in six experiments. Our research extends current thinking by providing a more parsimonious and comprehensive process explanation for how consumers judge the value of money. We discuss implications of our findings in the context of the introduction of Euro currency on January 1, 2002.

Performance Pay or Redistribution? Cultural Differences in Just-World Beliefs and Preferences for Wage Inequality

We identify and test a specific psychological mechanism underlying cross-national differences in preferences for performance-based versus redistributive compensation systems. We posit that individuals’ beliefs in the inherent justness and deservedness of individual outcomes (i.e., just world beliefs: JWBs) can help explain individual and culture-level variation in preferences for these compensation systems. Study 1 demonstrates a general correlation between the JWBs of a culturally diverse sample of former managers and their preferences for performance versus equal pay for an individual task. Study 2 shows that American participants exhibit stronger preferences for individual performance pay versus redistributive pay than do French participants, a difference that is mediated by cultural differences in JWBs. Study 3 holds national culture constant and replicates these effects by experimentally manipulating JWBs, demonstrating the causal nature of JWBs in determining preferences for performance-based versus redistributive compensation systems. Implications for organizational incentive systems, culture, and work motivation are discussed.