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ISSN : 1738-3110
The Effect of Subject Well-being on the Consumer's Pricing of Alternatives
Choi, Jong-An
Abstract
Research on subjective well-being (SWB) has flourished in recent years. As SWB determines cognitive and motivational processes, including social comparison and cognitive dissonance, it determines how consumers make decisions, including the comparison and evaluation of alternatives. Considering that the comparison and evaluation of alternatives is related to social comparison and cognitive dissonance, the influence of SWB on the comparison and evaluation of alternatives needs to be investigated. This research aims to examine the effect of SWB on the comparison and evaluation of alternatives, especially when people acquire additional information about their chosen or non-chosen alternatives, leading to a change of absolute/relative value of alternatives. The reasonable price of an alternative as evaluated by individuals is used as a measure reflecting the perceived value of an alternative. Putting all of this together, the current study intended to investigate the influence of absolute and relative value on the reasonable price of an alternative depending on SWB. Participants were randomly assigned to one of two experiment groups (deterioration of non-chosen alternative vs. improvement of non-chosen alternative). After reading consumer report ratings of alternatives shown on monitor screens, participants chose one of the alternatives, followed by the change of the consumer report ratings (deterioration of non-chosen alternative vs. improvement of non-chosen alternative). Participants evaluated the reasonable price of their chosen alternative based on the provided price of the non-chosen alternative. Two weeks after the experiment, they were asked to answer survey questionnaire on SWB measures. A regression was performed on the reasonable price with experiment groups, mean-centered SWB, and their interaction. There was a significant simple effect of groups and SWB. More importantly, these effects were qualified by the predicted interaction of groups and SWB. To interpret this interaction further, simple slope tests were performed on the price when SWB was centered at one standard deviation above (i.e., happy people) and below (i.e., unhappy people) the mean. As predicted, happy people rated the reasonable price of the chosen alternative higher in the improvement of non-chosen alternative group than in the deterioration of non-chosen alternative group. Conversely, unhappy people showed no price difference between groups. These results show that happy people pay attention to the absolute value of the alternative, whereas unhappy people give more weight to the relative value as well as to the absolute value of a chosen alternative, indicating that unhappy people are more sensitive to the negative information of a non-chosen alternative compared to happy people. The present research expanded the existing research stream on SWB by showing the influence of SWB on the consumers' evaluation of alternatives. Furthermore, this study adds to previous research on SWB and social comparison by suggesting that unhappy people tend to be more sensitive to negative social comparison information of alternatives even when a target of social comparison is not explicitly present. Moreover, these results yield some managerial implications on how to provide product information based on SWB in order to make products more attractive among the alternatives available to consumers.
- keywords
- 주관적 행복, 사회비교, 가격, 인지부조화
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