Affective Price Evaluations: How Pain, Pleasure, and Metacognitive Feeling Influence Price Evaluations

Manoj Thomas and Arnaud Monnier

Chapter 2 in New Directions in Behavioral Pricing, 2024, pp 29-50 from World Scientific Publishing Co. Pte. Ltd.

Abstract: The pricing literature has largely been tethered to the tenet in neoclassical economics that the price of a good in a market is determined by the forces of supply and demand, and demand, in turn, is influenced by consumers’ stable preferences and income levels. In this macro-level model, the consumer is often portrayed as a utility maximizer, making purchase decisions by trading the subjective value of money for the perceived utility of the good. Because of this tethering to neoclassical economics, early pricing researchers largely focused on estimating demand curves and how the demand curves changed with demographic variables, and product-related and category-related factors. They were not very interested in studying the role of affective processes in consumers’ price evaluations, mostly because of a lack of appreciation of the role of affect in judgment and decision-making. The literature on theoretical concepts and frameworks required to coherently characterize affective processes is therefore underdeveloped. Affective responses were not considered an important determinant of consequential economic decisions…

Keywords: New Currencies; Loyalty Program Miles as a Virtual Currency; Uncertainty in Value; Choice of Payment Mode; Loyalty Program Management; Affective Price Evaluations; Pain of Paying; Metacognitive Experience In Price Evaluation; The Ease-of-Recall Pricing Effect; The Ease-of-Computation Effect; Hedonic Price Evaluations; Price Fairness; Dual Entitlement; Communicating Price Changes; Communicating Price Differences; Internal Reference Price; Gain–Loss Asymmetry; Price Thresholds; Processing Price Information; Framing Price Changes; Framing Price Differences; Buyers' Purchase Goals; Round Versus Sharp (Odd) Prices; Price Promotion Information Processing; Ease of Computing Price Differences; Size of Right Digit Endings; Absolute Versus Relative Price Differences; Communicating Price Differences; Effects on Quality Inferences And Internal Reference Prices; Post-Promotion Price Expectations; Perceived Fairness of Price Promotions; Pay-What-You-Want (PWYW); Social Preferences; Models of Finitely Repeated Games with Incomplete Information; Signaling; Self-Signaling; Social Signaling; Social Preferences; Partitioned Pricing; Bargains; Efficiency Frontier (search for similar items in EconPapers)
JEL-codes: D4 L11 M31 (search for similar items in EconPapers)
Date: 2024
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