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Opportunity Cost Neglect

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Author Info

  • Shane Frederick
  • Nathan Novemsky
  • Jing Wang
  • Ravi Dhar
  • Stephen Nowlis
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    Abstract

    To properly consider the opportunity costs of a purchase, consumers must actively generate the alternatives that it would displace. The current research suggests that consumers often fail to do so. Even under conditions promoting cognitive effort, various cues to consider opportunity costs reduce purchase rates and increase the choice share of more affordable options. Sensitivity to such cues varies with chronic dispositional differences in spending attitudes. We discuss the implications of these results for the marketing strategies of economy and premium brands. (c) 2009 by JOURNAL OF CONSUMER RESEARCH, Inc..

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    File URL: http://www.journals.uchicago.edu/doi/pdf/10.1086/599764
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    Bibliographic Info

    Article provided by University of Chicago Press in its journal Journal of Consumer Research.

    Volume (Year): 36 (2009)
    Issue (Month): 4 (December)
    Pages: 553-561

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    Handle: RePEc:ucp:jconrs:v:36:y:2009:i:4:p:553-561

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    Web page: http://www.journals.uchicago.edu/JCR/

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    Cited by:
    1. Shavit, Tal & Rosenboim, Mosi & Malul, Miki, 2011. "Opportunity costs in buying and short selling--Do they really matter?," Economics Letters, Elsevier, vol. 112(1), pages 122-124, July.

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