Lisa E. Bolton

Consumer Perceptions of Price (Un)Fairness

A series of studies demonstrates that consumers are inclined to believe that the selling price of a good or service is substantially higher than its fair price. Consumers appear sensitive to several reference points--including past prices, competitor prices, and cost of goods sold--but underestimate the effects of inflation, overattribute price differences to profit, and fail to take into account the full range of vendor costs. Potential corrective interventions--such as providing historical price information, explaining price differences, and cueing costs--were only modestly effective. These results are considered in the context of a four-dimensional transaction space that illustrates sources of perceived unfairness for both individual and multiple transactions. Copyright 2003 by the University of Chicago.

How Do Price Fairness Perceptions Differ Across Culture

This research investigates the effects of across-consumer price comparisons on perceived price fairness as a function of culture. Collectivist (Chinese) consumers are more sensitive to in-group versus out-group differences than individualist (U.S.) consumers. The collectivist perspective orients consumers toward the in-group and heightens concerns about “face” (i.e., status earned in a social network) that arise from in-group comparisons. Process evidence for the causal role of cultural differences derives from manipulated self-construal and measurement of the emotional role of shame evoked by face concerns. Finally, in a robustness test, an alternative operationalization of the in-group/out-group distinction extends the findings to the context of firm relationships.

Price Fairness: Good and Service Differences and the Role of Vendor Costs

Prior research suggests that consumers are forgiving of a price increase that is commensurate with increased vendor costs. We argue that the perceived fairness of the price increase will also depend on the alignability of the cost and price increases, such that alignable increases will be perceived as more acceptable than nonalignable increases. Moreover, we predict that when a cost increase is nonalignable, consumers will be more receptive to a service price increase than a goods price increase. Evidence from a series of experiments supports both predictions.

Does Marketing Products as Remedies Create 'Get Out of Jail Free Cards?'

Our research investigates the marketing of preventive and curative “remedies” (products and services that offer ways of mitigating risk by decreasing either its likelihood or severity). Examples include debt consolidation loans and smoking cessation aids. Like risk-avoidance messages, advertisements for remedies aim to reduce risk—by advocating the use of the branded product or service promoted by the marketer. In a series of experiments, we demonstrate that remedy messages undermine risk perceptions and increase risky behavioral intentions as consumer problem status rises. Ironically, remedies undermine risk avoidance among those most at risk—a boomerang effect with negative consequences for consumer welfare.

Sticky Priors: The Perseverance of Identity Effects on Judgment

This research examines the perseverance of identity-based judgments by exploring the effectiveness of various corrective procedures that are intended to neutralize identity effects on judgment. The authors explore these effects in a series of studies that involve different kinds of identities (e.g., parent, teenager, businessperson, environmentalist) linked to different objects and issues (e.g., Internet censorship, pollution credits, electronic books). Moreover, they test the effectiveness of various corrective procedures, including feature-based analysis, counterfactual reasoning, counteridentification, and social influence. The authors find that identity-driven thinking leads to judgment that resists change, that is, a procedural bias or “sticky prior” in favor of an initial identity-based judgment. The findings attest to both the power of identity and the efficacy of analytic and nonanalytic corrective techniques.

Judging the Book by Its Cover? How Consumers Decode Conspicuous Consumption Cues in Buyer–Seller Relationships

Little empirical consumer research has focused on the decoding of conspicuous symbolism, that is, the inferences consumers make about others’ conspicuous consumption. Grounded in theory on social perception and role congruity, four experiments show that consumer inferences about and behavioral intentions toward conspicuous sellers are moderated by communal and exchange relationship norms. Specifically, conspicuous consumption by a seller decreases warmth inferences and, in turn, behavioral intentions toward the seller under the communal norm; conversely, it increases competence inferences and, in turn, behavioral intentions under the exchange norm. A sellers mere wealth triggers similar inferences, suggesting that conspicuous consumption is a surrogate for actual wealth. Priming consumers with persuasion knowledge inhibits the inferential benefits resulting from conspicuousness under the exchange norm. These findings reveal the theoretically meaningful role of the consumption context by showing that consumers’ warmth and competence inferences operate differentially in commercial relationships as a result of salient communal versus exchange norms, with important consequences for consumers’ behavioral intentions.

Stickier Priors: The Effects of Nonanalytic Versus Analytic Thinking in New Product Forecasting

The author investigates scenario generation and analogical reasoning as potential sources of bias in new product forecasting. In a series of studies, scenarios and analogies are shown to have persistent effects on judgment, despite subsequent use of corrective analytic techniques (e.g., counterfactual reasoning, counterscenarios, counteranalogies, decomposition, accountability). These findings demonstrate the robustness of nonanalytic processes on judgment and the need to be aware of their seductive effects.

Lay Theories of Medicine and a Healthy Lifestyle

This research proposes that consumers hold “lay theories of medicine” that guide their preferences and behaviors in the health domain. Lay theories of medicine incorporate lay beliefs about illnesses and symptoms (i.e., a form of lay diagnosis that may feature causal [un]certainty) and lay beliefs about health remedies (i.e., a treatment function that takes into account how consumers think remedies work, including the focus and action rapidity of treatment as additional dimensions of response efficacy). According to the conceptual framework, lay diagnosis and treatment beliefs together drive consumer preference among alternative health remedies, which, in turn, has downstream consequences for a healthy lifestyle. A series of studies finds support for this framework in an investigation of Western medicine and its Eastern counterparts (traditional Chinese and Ayurvedic medicines) among Chinese, Indian, and Asian American consumers.

Using Loan Plus Lender Literacy Information to Combat One-Sided Marketing of Debt Consolidation Loans

The marketing of debt consolidation loans is intended to offer a financial remedy to consumers faced with mounting debt and credit problems and unable to meet their monthly payments. The authors argue that debt consolidation loan marketing overemphasizes the short-term benefits (e.g., lower monthly payments) and downplays the considerable downside of these loans (e.g., longer repayment and more total interest paid). Two experiments demonstrate that a financial literacy intervention combining information about loans and lenders can help consumers understand and respond to debt consolidation loan marketing (whereas a basic financial numeracy intervention does not). Implications for consumers, marketers, public policy makers, and researchers who work in the area of financial literacy are discussed.

Eco-Product Choice Cuts Both Ways: How Proenvironmental Licensing Versus Reinforcement Is Contingent on Environmental Consciousness

This research identifies how choice of an eco-product (e.g., low-energy LED light bulbs, biodegradable paper towels) influences downstream, environmentally responsible behavior. Eco-product choice either reinforces or undermines subsequent environmentally responsible behavior, and this effect is contingent on individual consumers’ preexisting environmental consciousness: among less environmentally conscious consumers, proenvironmental behavior is undermined; in contrast, highly environmentally conscious consumers display reinforcement of proenvironmental behavior. The authors reveal that these differential effects are driven by two discrete processes working in opposition: goal satiation drives licensing in the case of less environmentally conscious consumers, and prosocial self-perceptions drive reinforcement among highly conscious consumers. In addition, the authors identify a point-of-purchase intervention that mitigates the detrimental effects among less environmentally conscious consumers. Together, these results shed light on the downstream consequences of eco-product choice for consumers, with implications for the marketing and regulation of such products.