Researchers from the California Institute of Technology have fascinating research on how consumers assign value to goods. Antonio Rangel, professor of neuroscience and economics at Caltech, poses the question this way: “At a restaurant, does it matter whether they simply list the name of the dessert, show a picture of the dessert, or bring the dessert cart around?”
According to the research team, current behavioral theories assume that consumer choices aren’t governed by their descriptions or the medium in which the offering is made. Tell that to Madison Avenue.
When the Caltech team measured how much hungry people were willing to pay for food delivered in text, image and on a tray, they were surprised to find that the image-format didn’t create a higher valuation than the text option. The bids on the food tray were 50 percent higher than the other two options.
Believing that the smell of the food could have affected the research conclusions, the researchers next used trinkets from the Caltech bookstore. The results were identical to the food experiments.
Now comes a surprise. When a plexiglass barrier was put between the trinkets and the subject, the value dropped to being the same as a line of text or image. Touching — or perhaps taking taking physical possession — of the item created a higher perceived value.
Clearly the findings support buying in a retail or market setting vs the Internet, if only this set of criteria is considered.
“Pavlovian Processes in Consumer Choice: The Physical Presence of a Good Increases Willingness-to-pay” will be published in the September issue of American Economic Review. via Science Daily