Is it Really Worth it? How Conscious and Nonconscious Prices Affect Consumerism

How much is too much for a new pair of pants? Fifty, sixty dollars? 100 dollars? Your answer may depend on a variety of things: how much you make, how badly you need a new pair of pants, and even how much value you place on fashion. However, there might be something else at play; how much you saw a different pair of pants for—or, for that matter, the price of a completely different item you saw. This process of comparing prices to previous values we have been exposed to is called the anchoring and adjustment heuristic and it is a well established phenomenon in the field of social psychology.

Specifically, the anchoring and adjustment heuristic suggests that we tend to focus, or anchor, on the first piece of information or value that we come across, and then adjust that value to where we think it matches the new stimulus. In most cases, that adjustment is insufficient, leaving our ultimate estimation of value far from what it actually is.

In a new study, Rashmi Adaval and Robert S. Wyer Jr., looked at the effects this heuristic may have on the common consumer. In four different experiments, the researchers examined the effects an anchor price had on products similar to the anchor product, dissimilar to the anchor product, and also the effect a subliminally primed anchor had on a product.

Researchers found that when exposed to either a high or low anchor price for a camera (either $419 or $49, respectively) participants underestimated or overestimated the price of a very similar camera. However, if participants were asked to think about the camera and its features before they saw the anchor, they were more likely to moderate this effect.

In a second experiment, the researchers examined whether a price for a camera could actually affect the price participants would estimate clothing–something completely different.   They found that in conditions where participants were exposed to the camera price first, the estimate was not affected that much, but in the condition where the participants were exposed to clothing first, the price they suggested for the camera was affected. The rationale behind this is that a camera is a high end electronic with a very specific set of features, but when we look for clothing, we only look for good quality and style. Those qualities can be transferred to a camera, but you can’t transfer a camera’s zoom to clothing.

Experiments three and four looked at whether subliminally primed values could have an effect on price estimation. The researchers found that when unconsciously exposed to a high or low number, participants were willing to pay more or less for a given product, respectively. However, again, this effect was moderated by reflective thinking about the product.

So what does all this mean for the average consumer? In essence, it means that if we are not careful, we can end up with incorrect assumptions of how much products are actually worth, and we may end up paying more than we should. Especially interesting is the fact that even unrelated products can influence our perception of a different commodity. So next time you are out buying a new TV, make sure to keep your eyes on the prize, and not be distracted by other prices you may see, even if they are for something else!

Adaval, R., & Wyer, R. J. (2011). Conscious and nonconscious comparisons with price anchors: Effects on willingness to pay for related and unrelated products. Journal Of Marketing Research, 48(2), 355-365. doi:10.1509/jmkr.48.2.355

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