NDLI: Do real payments really matter? A re-examination of the compromise effect in hypothetical and binding choice settings

Content Provider	Springer Nature Link
Author	Müller, Holger Kroll, Eike Benjamin Vogt, Bodo
Copyright Year	2011
Abstract	Numerous empirical studies have confirmed the existence of the compromise effect, which stipulates that options positioned between extreme alternatives in a product space are perceived as more attractive, hence becoming more likely to be chosen by consumers. However, literature on the topic frequently addresses the limited realism of prior work due to the artificial designs that were used. In a laboratory-based replication study, we examine the compromise effect across several categories in a more market-like scenario, in which experienced consumers make unforced decisions between real brands. In particular, we investigate whether the compromise effect varies in strength across the choice settings, depending on whether a hypothetical choice setting or a binding setting (in which subjects face buying obligations in terms of real payments for products) has been applied. While our results prove the robustness of the compromise effect for both choice frames, its strength differs significantly. Specifically, the compromise effect is evidently not as strong when real payments are introduced in binding choice settings. In addition, analysis of moderating factors confirms that compromise effects are stronger for categories where subjects are more in agreement about the relative quality of the options.
Starting Page	73
Ending Page	92
Page Count	20
File Format	PDF
ISSN	09230645
Journal	Marketing Letters
Volume Number	23
Issue Number	1
e-ISSN	1573059X
Language	English
Publisher	Springer US
Publisher Date	2011-04-08
Publisher Place	Boston
Access Restriction	One Nation One Subscription (ONOS)
Subject Keyword	Behavioral anomalies Compromise effect Experimental designs Real choices Hypothetical choices Real payments Marketing
Content Type	Text
Resource Type	Article
Subject	Business and International Management Economics and Econometrics Marketing

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