July 31, 2011
Avoid Relaxation When Shopping

Feeling tense or worried or critical? Then you are in a perfect mood to bid on eBay. Relaxed people were willing to bid higher prices than the non-relaxed.

NEW YORK July 28, 2011 A forthcoming paper in the American Marketing Association's Journal of Marketing Research by Professor Michel Tuan Pham, Kravis Professor of Business, Marketing, Columbia Business School; Iris W. Hung, Assistant Professor of Marketing, NUS Business School, National University of Singapore; and Gerald J. Gorn, Wang Seng Liang Professor of Business, Marketing Area Chair Professor at the School of Business, Faculty of Business and Economics, the University of Hong Kong, finds that states of relaxation consistently increase the monetary valuations of products, actually inflating these valuations by about 10 percent.

Relaxation methods used included music and video known to induce a state of greater relaxation. The result: A willingness to pay more for products than they are worth.

After being put in either of these two states, participants were asked to assess the monetary value of a variety products through various methods. In six studies involving more than 670 participants, relaxed individuals were consistently found to value the products more highly than their less relaxed counterparts. For example, in one simulated bidding study, relaxed participants bid about 11 percent higher for a digital camera than less-relaxed participants. Whereas the less-relaxed participants' bids were close to the product's estimated market price on online auction sites, relaxed participants' bids were about 15 percent higher than the estimated market price. The same effect was observed across a large variety of products in other studies.

We need to manage our own emotions in order to optimize our capacity to make decisions in our own interest. Meanwhile, in the opposing corner of the marketplace boxing match marketers are busy trying to achieve the opposite goal.

Share |      Randall Parker, 2011 July 31 08:03 PM  Brain Economics


Comments
Morgan said at August 1, 2011 11:02 AM:

Not sure a 15% discount is worth being on edge to get it. Because with that there's the anxiety pre-sale, the post-sale confirmation that you got a decent deal, the possibly buyer's remorse, etc. A lot of time and energy and stress, at least for me.

I can definitely see the value from a store's perspective of relaxing shoppers, and I can see maybe avoiding shopping if you're already relaxed, but I would not necessarily be amping up to hit the aisles.

Rather Not Say said at August 1, 2011 11:15 AM:

Morgan;


"Not sure a 15% discount is worth being on edge to get it."

It probably depends on whether you're buying a $4 latte or $400,000 real estate.

The Den Mother said at August 1, 2011 11:45 AM:

I've observed this in myself. I'm a much more critical buyer when I'm grumpy, not only in terms of price I'm willing to pay, but also in terms of what I actually buy. I'm more likely to make unnecessary impulse purchases when I'm in an easy-going mood. So while I agree that it isn't worth a 15% discount to MAKE yourself anxious, if you're already in such a state, consider it a good time to go shopping.

papertiger said at August 1, 2011 3:41 PM:

The tough go shopping. This worked for me yesterday. I wanted a five pound bag of sand from the hardware store. They only sold 50 lbs bags at $5.99 per. Money wasn't the object. The point was I didn't need that much sand. So I took a walk around their yard ending up in front of a pile of gravel, thought about offering the guy a buck if he'd let me get a bucketful, then rejected the thought.
The hardware people must have noted my persnickety behavior. When I relented and bought the original 50 lbs bag the price had dropped to $ 3.76.
So I now have an extra 40 lbs of sand. Open to offers.

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