The Functional Alibi

Journal of Academy of Consumer Research, Vol. 1(4): 479-496, doi/10.1086/688218, 2016

Columbia Business School Research Paper No. 16-84

Posted: 8 Nov 2016  

Anat Keinan

Harvard Business School

Ran Kivetz

Columbia Business School - Marketing

Oded Netzer

Columbia Business School - Marketing

Date Written: September 7, 2016

Abstract

Spending money on hedonic luxuries often seems wasteful, irrational, and even immoral. We propose that adding a small utilitarian feature to a luxury product can serve as a functional alibi, justifying the indulgent purchase and reducing indulgence guilt. We demonstrate that consumers tend to inflate the value, and usage frequency, of utilitarian features when they are attached to hedonic luxuries. Using a mixed-method approach, combining archival data (an analysis of over 1,000 online reviews of handbags) with studies conducted in the field and laboratory, we establish the functional alibi effect and show that it is mediated by guilt and more likely to occur when the luxury purchase is perceived as frivolous and expensive, and when the purchase is for oneself rather than a gift. We explore the effect of adding a functional alibi in a variety of marketing contexts, and we examine various consumer populations representing diverse demographics.

Suggested Citation

Keinan, Anat and Kivetz, Ran and Netzer, Oded, The Functional Alibi (September 7, 2016). Journal of Academy of Consumer Research, Vol. 1(4): 479-496, doi/10.1086/688218, 2016; Columbia Business School Research Paper No. 16-84. Available at SSRN: https://ssrn.com/abstract=2865171

Anat Keinan (Contact Author)

Harvard Business School ( email )

Soldiers Field Road
Morgan 270C
Boston, MA 02163
United States

Ran Kivetz

Columbia Business School - Marketing ( email )

New York, NY 10027
United States

Oded Netzer

Columbia Business School - Marketing ( email )

New York, NY 10027
United States

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