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Pavlovian Processes in Consumer Choice: The Physical Presence of a Good Increases Willingness-to-Pay

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  • Benjamin Bushong
  • Lindsay M. King
  • Colin F. Camerer
  • Antonio Rangel
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    Abstract

    This paper describes a series of laboratory experiments studying whether the form in which items are displayed at the time of decision affects the dollar value that subjects place on them. Using a Becker-DeGroot auction under three different conditions — (i) text displays, (ii) image displays, and (iii) displays of the actual items — we find that subjects' willingness-to-pay is 40-61 percent larger in the real than in the image and text displays. Furthermore, follow-up experiments suggest the presence of the real item triggers preprogrammed consummatory Pavlovian processes that promote behaviors that lead to contact with appetitive items whenever they are available. (JEL C91, D03, D12, D87)

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    Bibliographic Info

    Article provided by American Economic Association in its journal American Economic Review.

    Volume (Year): 100 (2010)
    Issue (Month): 4 (September)
    Pages: 1556-71

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    Handle: RePEc:aea:aecrev:v:100:y:2010:i:4:p:1556-71

    Note: DOI: 10.1257/aer.100.4.1556
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    References

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    1. Knetsch, Jack L & Sinden, J A, 1984. "Willingness to Pay and Compensation Demanded: Experimental Evidence of an Unexpected Disparity in Measures of Value," The Quarterly Journal of Economics, MIT Press, MIT Press, vol. 99(3), pages 507-21, August.
    2. Shiv, Baba & Fedorikhin, Alexander, 1999. " Heart and Mind in Conflict: The Interplay of Affect and Cognition in Consumer Decision Making," Journal of Consumer Research, University of Chicago Press, University of Chicago Press, vol. 26(3), pages 278-92, December.
    3. Solnick, Sara J., 2007. "Cash and alternate methods of accounting in an experimental game," Journal of Economic Behavior & Organization, Elsevier, vol. 62(2), pages 316-321, February.
    4. Kahneman, Daniel & Knetsch, Jack L & Thaler, Richard H, 1990. "Experimental Tests of the Endowment Effect and the Coase Theorem," Journal of Political Economy, University of Chicago Press, University of Chicago Press, vol. 98(6), pages 1325-48, December.
    5. Klaus Wertenbroch, 1998. "Consumption Self-Control by Rationing Purchase Quantities of Virtue and Vice," Marketing Science, INFORMS, INFORMS, vol. 17(4), pages 317-337.
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    Blog mentions

    As found by EconAcademics.org, the blog aggregator for Economics research:
    1. Weekend Links
      by Liam Delaney in Geary Behaviour Centre on 2011-01-28 15:49:00
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    Cited by:
    1. Ernst Fehr & Antonio Rangel, 2011. "Neuroeconomic Foundations of Economic Choice--Recent Advances," Journal of Economic Perspectives, American Economic Association, vol. 25(4), pages 3-30, Fall.
    2. Teresa, Briz & Drichoutis, Andreas & Nayga, Rodolfo & House, Lisa, 2011. "Examining Projection Bias in Experimental Auctions: The Role of Hunger and Immediate Gratification," MPRA Paper 44764, University Library of Munich, Germany, revised 05 Mar 0013.
    3. Shimokawa, Satoru, 2013. "Two Asymmetric and Conflicting Learning Effects of Calorie Posting on Overeating: Laboratory Snack Choice Experiment," 2013 Annual Meeting, August 4-6, 2013, Washington, D.C., Agricultural and Applied Economics Association 149687, Agricultural and Applied Economics Association.

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