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The Feedback-Related Negativity and the P300 Brain Potential Are Sensitive to Price Expectation Violations in a Virtual Shopping Task

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  • Alexandre Schaefer
  • Luciano G Buratto
  • Nobuhiko Goto
  • Emilie V Brotherhood

Abstract

A large body of evidence shows that buying behaviour is strongly determined by consumers’ price expectations and the extent to which real prices violate these expectations. Despite the importance of this phenomenon, little is known regarding its neural mechanisms. Here we show that two patterns of electrical brain activity known to index prediction errors–the Feedback-Related Negativity (FRN) and the feedback-related P300 –were sensitive to price offers that were cheaper than participants’ expectations. In addition, we also found that FRN amplitude time-locked to price offers predicted whether a product would be subsequently purchased or not, and further analyses suggest that this result was driven by the sensitivity of the FRN to positive price expectation violations. This finding strongly suggests that ensembles of neurons coding positive prediction errors play a critical role in real-life consumer behaviour. Further, these findings indicate that theoretical models based on the notion of prediction error, such as the Reinforcement Learning Theory, can provide a neurobiologically grounded account of consumer behavior.

Suggested Citation

  • Alexandre Schaefer & Luciano G Buratto & Nobuhiko Goto & Emilie V Brotherhood, 2016. "The Feedback-Related Negativity and the P300 Brain Potential Are Sensitive to Price Expectation Violations in a Virtual Shopping Task," PLOS ONE, Public Library of Science, vol. 11(9), pages 1-21, September.
    • Handle: RePEc:plo:pone00:0163150
    DOI: 10.1371/journal.pone.0163150
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    References listed on IDEAS

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    1. Faisal Mushtaq & Gijsbert Stoet & Amy Rachel Bland & Alexandre Schaefer, 2013. "Relative Changes from Prior Reward Contingencies Can Constrain Brain Correlates of Outcome Monitoring," PLOS ONE, Public Library of Science, vol. 8(6), pages 1-11, June.
    2. Rongjun Yu & Wu Zhou & Xiaolin Zhou, 2011. "Rapid Processing of Both Reward Probability and Reward Uncertainty in the Human Anterior Cingulate Cortex," PLOS ONE, Public Library of Science, vol. 6(12), pages 1-7, December.
    3. Winer, Russell S, 1986. "A Reference Price Model of Brand Choice for Frequently Purchased Products," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 13(2), pages 250-256, September.
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