How Consumers Choose Between Equated Alternatives

Posted: 22 Nov 2006 Last revised: 23 Jan 2013

Joseph P. Simmons

University of Pennsylvania - The Wharton School

Leif D. Nelson

University of California, Berkeley - Haas School of Business

Date Written: June 30, 2009

Abstract

This research investigates how consumers choose between options when prices offset perceived quality differences. We suggest that consumers choose between equated alternatives by first assessing which option is of higher quality, and then relying on their confidence in this assessment to determine how much weight to give to equating prices: The lower the confidence in their quality assessments, the more weight they give to equating prices, and the more likely they are to choose a lower-priced option against an equally attractive but higher-quality alternative. In five studies, we manipulated consumers’ confidence in their quality assessments and then asked them to choose between equated alternatives. As predicted, consumers were more likely to choose the higher-quality option against an equated alternative when they were more confident in their quality assessments. This occurred even when confidence was manipulated without altering the choice options themselves (e.g., by degrading the font of the questionnaire).

Keywords: Consumer Choice, Prominence Effect, Constructed Preferences, Behavioral Decision Theory

Suggested Citation

Simmons, Joseph P. and Nelson, Leif D., How Consumers Choose Between Equated Alternatives (June 30, 2009). Available at SSRN: https://ssrn.com/abstract=946273 or http://dx.doi.org/10.2139/ssrn.946273

Joseph P. Simmons (Contact Author)

University of Pennsylvania - The Wharton School ( email )

3733 Spruce Street
Philadelphia, PA 19104-6374
United States

Leif D. Nelson

University of California, Berkeley - Haas School of Business ( email )

545 Student Services Building, #1900
2220 Piedmont Avenue
Berkeley, CA 94720
United States

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