1. Study suggests people ignore their own moral standards when acting as market participants

    May 26, 2013 by Ashley

    From the press release via ScienceDaily:

    tablet computerMany people express objections against child labor, exploitation of the workforce or meat production involving cruelty against animals. At the same time, however, people ignore their own moral standards when acting as market participants, searching for the cheapest electronics, fashion or food.

    Thus, markets reduce moral concerns. This is the main result of an experiment conducted by economists from the Universities of Bonn and Bamberg.

    The results are presented in the latest issue of the journal Science.

    Prof. Dr. Armin Falk from the University of Bonn and Prof. Dr. Nora Szech from the University of Bamberg, both economists, have shown in an experiment that markets erode moral concerns. In comparison to non-market decisions, moral standards are significantly lower if people participate in markets.

    In markets, people ignore their individual moral standards

    “Our results show that market participants violate their own moral standards,” says Prof. Falk. In a number of different experiments, several hundred subjects were confronted with the moral decision between receiving a monetary amount and killing a mouse versus saving the life of a mouse and foregoing the monetary amount. “It is important to understand what role markets and other institutions play in moral decision making. This is a question economists have to deal with,” says Prof. Szech.

    To study immoral outcomes, we studied whether people are willing to harm a third party in exchange to receiving money. Harming others in an intentional and unjustified way is typically considered unethical,” says Prof. Falk.

    The animals involved in the study were so-called “surplus mice,” raised in laboratories outside Germany. These mice are no longer needed for research purposes. Without the experiment, they would have all been killed. As a consequence of the study many hundreds of young mice that would otherwise all have died were saved. If a subject decided to save a mouse, the experimenters bought the animal. The saved mice are perfectly healthy and live under best possible lab conditions and medical care.

    Simple bilateral markets affect moral decisions

    A subgroup of subjects decided between life and money in a non-market decision context (individual condition). This condition allows for eliciting moral standards held by individuals. The condition was compared to two market conditions in which either only one buyer and one seller (bilateral market) or a larger number of buyers and sellers (multilateral market) could trade with each other. If a market offer was accepted a trade was completed, resulting in the death of a mouse.

    Compared to the individual condition, a significantly higher number of subjects were willing to accept the killing of a mouse in both market conditions. This is the main result of the study. Thus markets result in an erosion of moral values. “In markets, people face several mechanisms that may lower their feelings of guilt and responsibility,” explains Nora Szech. In market situations, people focus on competition and profits rather than on moral concerns. Guilt can be shared with other traders. In addition, people see that others violate moral norms as well.

    “If I don’t buy or sell, someone else will.”

    In addition, in markets with many buyers and sellers, subjects may justify their behavior by stressing that their impact on outcomes is negligible. “This logic is a general characteristic of markets,” says Prof. Falk. Excuses or justifications appeal to the saying, “If I don’t buy or sell now, someone else will.” For morally neutral goods, however, such effects are of minor importance.

    Nora Szech explains: “For goods without moral relevance, differences in decisions between the individual and the market conditions are small. The reason is simply that in such cases the need to share guilt or excuse behavior is absent.”


  2. Study suggests people with relationship woes may prefer sad music

    by Ashley

    From the University of Chicago Press Journals press release via EurekAlert!:

    Brain MusicConsumers experiencing relationship problems are more likely to prefer aesthetic experiences that reflect their negative mood, according to a new study in the Journal of Consumer Research.

    “Emotional experiences of aesthetic products are important to our happiness and well-being. Music, movies, paintings, or novels that are compatible with our current mood and feelings, akin to an empathic friend, are more appreciated when we experience broken or failing relationships,” write authors Chan Jean Lee (KAIST Business School), Eduardo B. Andrade (FGV School of Administration), and Stephen E. Palmer (University of California, Berkeley).

    Consumers experience serious emotional distress when intimate relationships are broken, and look for a surrogate to replace the lost personal bond. Prior research has reported that consumers in a negative mood prefer pleasant, positive aesthetic experiences (cheerful music; fun comedies) to counter their negative feelings. However, under certain circumstances, consumers in negative moods might choose aesthetic experiences consistent with their mood (sad music; tear-jerking dramas) even when more pleasant alternatives are also available.

    In one study, consumers were presented with various frustrating situations and asked to rate angry music relative to joyful or relaxing music. Consumers liked angry music more when they were frustrated by interpersonal violations (being interrupted; someone always being late) than by impersonal hassles (no internet connection; natural disaster).

    In another study, consumers were asked to recall experiences involving loss. Preference for sad music was significantly higher when they had experienced an interpersonal loss (losing a personal relationship) versus an impersonal loss (losing a competition).

    “Interpersonal relationships influence consumer preference for aesthetic experiences. Consumers seek and experience emotional companionship with music, films, novels, and the fine arts as a substitute for lost and troubled relationships,” the authors conclude.

     


  3. Study examines reasons for brand affinity and aversion

    May 25, 2013 by Ashley

    From the USC Marshall School of Business press release via EurekAlert!:

    stern businessWhy do brands such as Manchester United and Apple capture hearts and minds? When consumers feel a strong emotional attachment to a brand, there is seemingly nothing we would not do–from paying more for it to defending it against detractors. For all the millions of dollars spent on advertising and other efforts, however, consumers rarely feel an affinity for brands.

    So how do marketers make consumers develop a strong attachment for a product or service? According to a recent study from USC Marshall School of Business, it is achieved by appealing to people’s aesthetic needs (enticing/annoying to the self), functional needs (enabling/disabling for the self) and spiritual needs (whether something is enriching/impoverishing). In short, brands to which we are loyal, evoke warm feelings and provide pleasure, speak to who we are and help manage the problems we have in daily life.

    “Attachment-aversion (AA) model of customer-brand relationships,” published in the Journal of Consumer Psychology and co-authored by USC Marshall’s C. Whan Park, Joseph A. DeBell Chair in Business Administration and professor of marketing; Andreas B. Eisingerich, associate professor of marketing, Imperial College (London) Business School; and Jason Whan Park, Ph.D., University of Pittsburgh, identifies three factors that must be in place in order to build strong emotional attachment to brands and, conversely, limit aversion to a product or service.

    Marketers who want to build emotional affinity for their brands need to appeal to consumers on three fronts: strong aesthetics or self-enticing properties such as the taste of deep chocolate or the sleek design of a European car, have self-enabling benefits or the ability to solve customer problems (such as Swiss Army Knife, which allows one to feel power over one’s environment) and self-enriching benefits or those that resonate with customers’ beliefs or values and support their self-identities (activated for example, by location brands such as one’s hometown, a membership to nonprofit or a luxury brand such as Rolex that is aspirational).

    These factors, the three E’s—enticement, enablement and enrichment—are critical for all brands and their interplay determines our distance to the brand: whether we are more attached or have an aversion.

    “There are many cases these days where people are very adverse to certain brands. This is a serious issue,” said Park. “Why people become so antagonistic toward a brand is based on these three reasons, when it displeases them aesthetically or doesn’t help them solve their daily problems or is contrary to their personal beliefs.

    To test their attachment-aversion model, the researchers carefully developed the four-item scale of the attachment-aversion measure and conducted three studies, assessing consumer purchasing behavior over time, based on carefully chosen products: Apple, a product brand that draws strong consumer loyalty from their compelling design and emphasis on creativity; Manchester United, a soccer franchise that tends to generate extreme reactions in Great Britain (both positive and negative); and a grocery store chain in Austria. The scholars measured attachment and aversion by looking at attitudes and actions: what consumers would do for these brands, including defending them against criticism, participating in an affiliated charity event and feeling happy (sad) when good (bad) things happened to a brand. The researchers found that their model was better able to predict consumer reactions through not only their stated future intentions, but actual purchasing behavior during the final study.

    Whether a brand was self-enriching was the stronger predictor of whether there would be a small distance/attachment or a larger distance/aversion to a brand. The researchers cite the strength of Nike’s “Just Do It” as an example. In addition, the researchers also found that the older consumers were more motivated by self-enriching qualities of brands versus self-enticing benefits (aesthetic appeal), while the opposite was true for younger consumers.

    The study also distinguished two other attitudes towards brands that marketers need to address quite differently: the mixed (both positive and negative) perceptions of a brand and indifference. Brand managers need to focus on reducing the distance between customers and a brand, by examining how much value customers perceive from the current offering of a brand with respect to those three E’s.

    Great brands simultaneously offer sensory pleasure and self-pride. Sensory pleasure comes from the self-enticing product cues (e.g., product design, package design, color, brand logo, etc.). Self-pride comes from two different sources: self-enabling benefits of a product and self-enriching message of a brand,” said Park.

    Self-enabling benefits provide a boost of self-efficacy and self-confidence. “That’s when you feel proud of yourself—when you can deal with daily problems without difficulty and feel secure,” said Park. “Self-enriching messages of a brand makes you feel good about yourself because you relate yourself to its moral values and philosophies.”

     


  4. Study suggests poor translations may cause bias in multilingual survey research

    May 17, 2013 by Ashley

    From the University of Chicago Press Journals press release via EurekAlert!:

    ClipboardSurvey results may be biased in multilingual research if consumers are unfamiliar with translated terms, according to a new study in the Journal of Consumer Research.

    “Consumers are influenced by the specific labels used to mark the endpoints of a survey response scale. This is particularly important in multilingual research. If the response category labels used in different languages are not equivalent, this could bias survey results,” write authors Bert Weijters, Maggie Geuens (both Ghent University and Vlerick Business School), and Hans Baumgartner (Pennsylvania State University).

    Many surveys use response scales asking consumers to indicate their agreement or disagreement with certain statements. These agreement rating scales are typically anchored by category labels such as “strongly (dis)agree” or “completely (dis)agree.”

    In a study with English and French speaking consumers in the US, UK, Canada, and France, differences in familiarity with labels led to different endorsement rates for the endpoints of agreement scales. In both English and French, response categories received more responses when the associated labels were more commonly used in day-to-day language (completely agree or tout à fait d’accord versus extremely agree or extrêmement d’accord).

    In another study, self-reported awareness of the cholesterol level of various foods was significantly stronger when using the Dutch equivalent of a scale ranging from “completely disagree” to “completely agree” than when using a scale ranging from “strongly disagree” to “strongly agree.”

    “Survey researchers should pay more attention to the labels assigned to response categories on rating scales and make sure that the response category labels used in different languages are equivalent in terms of familiarity. Differences in the category labels used in different languages may lead to differences in responses resulting from poor translation,” the authors conclude.

     


  5. Study suggests proximity of images affects perception of product effectiveness

    May 16, 2013 by Ashley

    From the University of Chicago Press Journals press release via EurekAlert!:

    senior_asian_manConsumers believe a product is more effective when images of the product and its desired outcome are placed closer together in advertisements, according to a new study in the Journal of Consumer Research.

    Merely changing the spatial proximity between the image of a product and its desired effect in an advertisement influences judgment of product effectiveness. Consumers tend to judge the product to be more effective when the two images are closer versus farther apart,” write authors Boyoun (Grace) Chae (University of British Columbia), Xiuping Li (National University of Singapore), and Rui (Juliet) Zhu (University of British Columbia).

    Many advertisements promoting the effectiveness of a product show both a product image (anti-wrinkle cream) and an image of the promised results (a face without wrinkles). Objectively, the distance between the two images should not affect how consumers judge the product’s quality.

    In a series of studies, consumers were asked to judge the effectiveness of a variety of products promising specific results (acne cream, pain reliever, nasal allergy spray, bug spray, fabric softener). Consumers tended to assume a product was more effective when its image was placed closer to that of its promised effect. The proximity of the images was more influential when consumers were less knowledgeable about a product category or when the results were expected sooner rather than later.

    Companies should understand the subtle effect that spatial proximity between images has on consumer judgment of product effectiveness. When companies want to promote the immediate effects of their products, images of the product and its desired effect should be put closer to each other in an advertisement.

    “The spatial proximity between visual representations of cause and effect in an advertisement can influence consumer judgments of product effectiveness. The closer the distance between an image of a product (an acne treatment) and that of its potential effect (a smooth face), the more effective consumers will judge the product to be,” the authors conclude.

     


  6. Study suggests skipping meals and shopping sabotages diets

    May 8, 2013 by Ashley

    From the Cornell University press release via EurekAlert!:

    groceriesSkipping meals can sabotage your shopping – and your diet, according to a new Cornell study. Even short term food deprivation not only increases overall grocery shopping, but leads shoppers to buy 31% more high calorie foods.

    “People skip meals for all sorts of reasons – dieting, fasting, insane schedules that make you forget to eat,” says Aner Tal, PhD, from the Cornell Food and Brand Lab, lead author of the study. “But it doesn’t matter why you skipped a meal, it can still make your nutritionist cry – making you buy more potato chips and ice-cream and less baby carrots and skim milk.”

    Don’t shop hungry!

    In one study, 68 meal skippers were either given food (wheat thins) to reduce their fasting-induced hunger or not given any food to keep them hungry following the fast, and then asked to make purchases at a simulated grocery store. The hungry shoppers that did not eat the wheat thins bought 18.6% more food – including 31% more high calorie snacks.

    At a follow-up study researchers observed late afternoon shoppers at an actual grocery store during the hours between lunch and dinner –the hungriest hours—and the hours just after lunch, when people tend to be satiated. Late-afternoon shoppers purchased fewer low-calorie foods proportionate to their overall purchases, than those shopping after lunch.

    The best advice to avoid this from happening? “Make sure you don’t skip a meal, or at least have a snack like apples or string cheese in your office,” says Brian Wansink PhD, co-author of the paper. “Breakfast is the most skipped meal, and even having something for lunch that has protein will cut your hunger edge.”

     


  7. Study suggests culture may play role in whether people judge product by its price

    April 17, 2013 by Ashley

    From the Journal of Consumer Research press release via ScienceDaily:

    comparison shoppingConsumers from less individualistic cultures are more likely to judge the quality of a product by its price, according to a new study in the Journal of Consumer Research.

    “Culture influences the tendency to use the price of a product to judge its quality. Although price-quality judgments are made by consumers across cultures, less individualistic consumers (Koreans, Japanese, Indians, Chinese) rely more on price to judge quality than do individualists (Americans, British, French, Canadians, Australians),” write authors Ashok K. Lalwani (Indiana University) and Sharon Shavitt (University of Illinois at Urbana-Champaign).

    Less individualistic consumers have a holistic thinking style and are therefore more likely to see things as interconnected and to find relationships between various product attributes. Individualists, in contrast, have an analytic thinking style and tend to focus on separating and distinguishing between product attributes and less on the relationships between them.

    In a series of studies, consumers were encouraged to think holistically (versus analytically). Those from less individualistic cultures were more likely to use price to judge the quality of products as diverse as paper towels, shaving cream, hand soap, bicycles, and watches.

    These findings help to identify viable target markets for companies with higher prices. Advertisements or in-store contests inviting consumers to focus on background images or to identify interconnections in a larger picture should make consumers think more holistically and rely more on price as a signal for quality.

    “Because less individualistic consumers are more likely to use the price of a product to infer its quality, they may represent a better prospective market for higher-priced brands, particularly when brands compete on the basis of quality. Although consumers around the world are responsive to deals and price-reductions, competing largely on the basis of lower price may be less effective for collectivistic markets, particularly when launching new brands or promoting brands whose prices are not well known,” the authors conclude.


  8. Study suggests buyers and sellers focus on different aspects of product

    April 16, 2013 by Ashley

    From the Journal of Consumer Research press release via ScienceDaily:

    shoppingSellers mostly focus on the desirability of a product when setting prices. Buyers, however, focus evenly on the product itself and what’s entailed in using it, according to a new study in the Journal of Consumer Research.

    “Sellers tend to focus on aspects of a product that are related to its desirability. Buyers, in contrast, focus both on its desirability and the feasibility of using and consuming the product. This difference in focus leads buyers and sellers to set different prices for the same product,” write authors Caglar Irmak (University of South Carolina), Cheryl J. Wakslak (University of Southern California), and Yaacov Trope (Stern School of Business, New York University).

    Imagine you are selling a concert ticket. When setting the price, you would probably only think about the performance. However, if you were thinking about purchasing the ticket, you would probably consider both the performance and factors such as driving to the venue or parking.

    In one study, consumers were asked to imagine they are selling or buying a ticket to a performance by a popular entertainer with a difficult ticketing process or one by a less well known performer with easy ticketing. Selling prices were higher than buying prices in the first scenario, while there was no difference in the latter.

    Companies often promote the primary aspects of products (such as its desirability). However, secondary aspects (such as usability) are an important concern for buyers when evaluating a product. Companies should take into account that buyers may also think about what’s involved in using a product.

    “Sellers tend to focus on the outcome of a product and are therefore likely to think in terms of its primary, goal-relevant aspects. On the other hand, buyers contemplate using a product and are likely to focus on both the outcome and the ease or difficulty of reaching the outcome. Hence, they pay equal attention to the primary and secondary aspects of the product,” the authors conclude.


  9. Study suggests sense of closure may increase satisfaction with purchases

    April 12, 2013 by Ashley

    From the Journal of Consumer Research press release via AlphaGalileo:

    Certain physical acts of completion provide consumers with a sense of closure that makes them happier with their purchases, according to a new study in the Journal of Consumer Research.

    “Choice closure, the psychological process through which consumers perceive a decision as complete and stop reassessing their choice, can increase satisfaction with decisions involving many alternatives. Subtle physical acts that symbolize closure can trigger choice closure and increase satisfaction,” write authors Yangjie Gu, Simona Botti, and David Faro (all London Business School).

    After making a purchase, consumers often revisit their decision and think about other options that were available. This tendency can lower satisfaction with a decision, especially when the choice is a difficult one.

    In a series of studies, consumers were asked to choose from a large selection of products (chocolates, teas, biscuits) and then either performed or didn’t perform a physical act of closure. In one study, consumers were asked to choose one of twenty-four chocolates displayed on a tray covered by a lid and then either put the lid back on the tray or not before eating the selected chocolate. In other studies, consumers chose an item from an extensive menu and either closed the menu or not before tasting the chosen item. Consumers who closed the lid or the menu liked what they ate more than those who didn’t perform an act of closure.

    Not all acts of completion are equally effective in facilitating choice closure. For example, acts of closure performed by the decision maker after making a choice are more likely to lead to choice closure.

    “Consumers are less likely to be satisfied with a purchase when they compare it to other options. Physical acts of closure enable consumers to perceive a difficult decision as complete and limit their tendency to compare their selection with the options they have rejected. Since such comparisons tend to be unfavorable, closure triggered by acts of closure will increase consumer satisfaction when there are many choices,” the authors conclude.

     


  10. Study suggests mixing eBay and Facebook may reduce bidding prices

    by Ashley

    From the Journal of Consumer Research press release via AlphaGalileo:

    In a competitive context, consumers are willing to pay significantly more to win when other bidders are unknown, according to a new study in the Journal of Consumer Research.

    “The tendency to assume that other consumers are similar to us is reversed when we’re in a competitive, as opposed to cooperative, situation. This alters our aggressiveness toward others and the prices we are willing to bid in auctions,” write authors David A. Norton (University of Connecticut), Cait Lamberton (University of Pittsburgh), and Rebecca Walker Naylor (Ohio State University).

    Consumers tend to believe strangers are socially similar. This lowers aggressiveness toward others. But competitive contexts lead consumers to become more aggressive because they infer that others are different.

    In a series of simulated online auctions, some consumers viewed profiles of other bidders that were manipulated to be either similar or different (based on demographic information like age, gender, and location), while others weren’t given any information about other bidders. Consumers consistently bid less aggressively when they believed their competitors were similar rather than different. More interestingly, bidding aggressiveness and prices were much higher when other bidders were different or unknown.

    Companies using auctions may want to resist the urge to link consumers to social media profiles. Consumers who discover they share traits with the people they’re competing against may lower their aggressiveness, pushing prices down.

    “Competitive contexts radically change the assumptions we make about other consumers compared to cooperative situations. When we compete, we want to go for the jugular – and we won’t do that when we know we’re competing against consumers who are similar to us. But we behave more aggressively when there is no other information about other consumers because we assume they are different,” the authors conclude.