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|