The Dissociation Between Monetary Assessment and Predicted Utility

On Amir (), Dan Ariely () and Ziv Carmon ()
Additional contact information
On Amir: Rady School of Management, University of California at San Diego, La Jolla, California 92037
Dan Ariely: Fuqua School of Business, Duke University, Durham, North Carolina 27706
Ziv Carmon: INSEAD, Asia Campus, 138676, Singapore

Marketing Science, 2008, vol. 27, issue 6, 1055-1064

Abstract: We study the dissociation between two common measures of value—monetary assessment of purchase options versus the predicted utility associated with owning or consuming those options, a disparity that is reflected in well-known judgment anomalies and that is important for interpreting market research data. We propose that a significant cause of this dissociation is the difference in how these two types of evaluations are formed—each is informed by different types of information. Thus, dissociation between these two types of measures should not be interpreted as failure to map utility onto money, as such mapping is not really attempted. We suggest that monetary assessment tends to focus on the transaction in which the purchase alternative would be acquired or forgone (e.g., how fair the transaction seems), failing to adequately reflect the purchase alternative itself (e.g., the expected pleasure of owning or consuming it), which is what informs predicted utility judgments. We illustrate the value of this idea by deriving and testing empirical predictions of disparities in the impact of different types of information and manipulations on the two types of value assessment.

Keywords: decision-making; buyer behavior; market research (search for similar items in EconPapers)
Date: 2008
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (13)

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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormksc:v:27:y:2008:i:6:p:1055-1064

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