Pain of Paying? — A Metaphor Gone Literal: Evidence from Neural and Behavioral Science

51 Pages Posted: 20 Jan 2017 Last revised: 16 Apr 2017

Nina Mazar

Boston University - Questrom School of Business

Hilke Plassmann

INSEAD

Nicole Robitaille

Queen's University

Axel Lindner

Halle Institute for Economic Research

Date Written: December 16, 2016

Abstract

How do individuals consider the price of a good when making purchase decisions? Standard economic theories assume an analytical process: Individuals consider the opportunity cost. Recent behavioral economic theories suggest an additional, hedonic process: Individuals consider the immediate displeasure or “pain of paying” the price.

This paper is the first to present direct empirical evidence that the metaphor is more than a theoretical concept; it stands for a literal pain experience. In addition, the authors characterize its quality as an affective pain experience in three incentive-compatible experiments. First, an fMRI experiment suggests an affective pain experience and rejects a somatosensory (i.e., physical) pain experience.

Second, the facilitation of affective pain perception through conceptual priming decreases willingness to pay (WTP). Third, misattributions of pain perception to placebo drugs increases versus decreases WTP for affective pain enhancers versus affective pain relievers. Conversely, facilitation and misattribution of somatosensory pain perceptions do not alter WTP.

Keywords: Affective Pain-processing Pathways, Purchasing, Microeconomic Theory, Mental Accounting, Consumer Neuroscience, Pricing

Suggested Citation

Mazar, Nina and Plassmann, Hilke and Robitaille, Nicole and Lindner, Axel, Pain of Paying? — A Metaphor Gone Literal: Evidence from Neural and Behavioral Science (December 16, 2016). Rotman School of Management Working Paper No. 2901808; INSEAD Working Paper No. 2017/06/MKT. Available at SSRN: https://ssrn.com/abstract=2901808 or http://dx.doi.org/10.2139/ssrn.2901808

Nina Mazar

Boston University - Questrom School of Business ( email )

595 Commonwealth Avenue
Boston, MA MA 02215
United States

Hilke Plassmann (Contact Author)

INSEAD ( email )

Boulevard de Constance
77305 Fontainebleau Cedex
France

Nicole Robitaille

Queen's University ( email )

Kingston, Ontario K7L 3N6
Canada

Axel Lindner

Halle Institute for Economic Research ( email )

P.O. Box 11 03 61
Kleine Maerkerstrasse 8
D-06017 Halle, 06108
Germany

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