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JOURNAL OF CONSUMER PSYCHOLOGY, 15(4), 325-333Copyright 2005, Lawrence Erlbaum Associates, Inc.
University of Texas at San Antonio Consumers' reactions to a difference in price can depend on how it is framed. If buyers interpretpaying $60 rather than $65 as getting a $5 discount, then they are likely to consider paying $60to be a gain and paying $65 to be a nongain. Alternatively, if they interpret having to pay $65rather than $60 as incurring a $5 penalty, then they may consider paying $60 to be a nonloss andpaying $65 to be a loss. Similarly, sellers can also experience gains, nongains, nonlosses, andlosses. This article suggests that buyers are prevention focused and consequently place agreater emphasis on loss-related frames, whereas sellers are promotion focused and place agreater emphasis on gain-related frames. Therefore, for equivalent positive outcomes, buyersfeel better about nonlosses, but sellers feel better about gains. For equivalent negative out-comes, buyers feel worse about losses, but sellers feel worse about nongains. These effects,however, disappear when there is little motivation to process information about the monetarytransaction.
Consumers acquire products as buyers and dispose them of $5." (The salesperson could instead have said, "If you as sellers. After they decide to buy or sell, however, they have the first edition, you will take a loss of $5.") might interpret the price they pay or receive using differentframes (Levin, Schneider, & Gaeth, 1998; Tversky & Jack and Jill can experience one of four outcomes: (a) Kahneman, 1981). Consider the following vignettes:1 gain, (b) nongain, (c) loss, and (d) nonloss (Brendl, Higgins,& Lemm, 1995; Idson, Liberman, & Higgins, 2000). In • Jack is in the bookstore, buying a book. The salesper- Jack's case, getting or not getting a discount might be experi- son says, "You will have to pay $60 if you pay by cash enced as a gain or nongain, respectively, whereas paying or but $65 if you pay by credit card." As Jack checks his not paying a penalty might be viewed as a loss or nonloss, re- wallet to see if he has enough cash, the salesperson spectively. In Jill's case, getting or not getting a bonus could adds, "There is a $5 discount for paying by cash." (The be viewed as a gain or nongain, respectively, whereas incur- salesperson could instead have said, "There is a $5 pen- ring or not incurring a loss could be seen as a loss or nonloss, respectively. In this article, we consider the affective reac- • Jill is in the bookstore, selling a used book. The sales- tions evoked by such framed outcomes. Given equivalent person says, "The buy-back price for the first edition of positive outcomes, what would make Jack and Jill feel better: the book is $60 and that for the second edition is $65." a nonloss or a gain? Given equivalent negative outcomes, As Jill checks the edition she has, the salesperson adds, what would make them feel worse: a loss or a nongain? This "If you have the second edition, you will get a bonus of research suggests that the answers will not be the same forJack and Jill; buyers and sellers will respond differently to Requests for reprints should be sent to Ashwani Monga, University of Texas at San Antonio, College of Business, 6900 North Loop 1604 West, The idea that buyers are different from sellers is not new.
San Antonio, TX 78249. E-mail: ashwani.monga@utsa.edu Research on the endowment effect (Thaler, 1980) suggests The buying illustration is based on Thaler's (1980) cash-credit example and is a modified version of the bookstore scenario used by Idson, Liberman, that the lowest price at which consumers are willing to sell a product they own is considerably higher than the highest price they are willing to pay to acquire it (Kahneman, individuals are motivated to process the information (e.g., Knetsch, & Thaler, 1990). It has also been found that buying because the money involved is high). We elaborate on this prices are more influenced by variables such as salient refer- conceptualization in the following pages and present three ence prices, whereas selling prices are more influenced by experiments in support of its implications.
variables such as benefits of possessing the item (Carmon &Ariely, 2000). Other research shows that arbitrary anchorsmight also influence these prices (Simonson & Drolet, 2004). Therefore, it is clear that buyers and sellers differwhen they are asked to decide the price they would consider.
According to Thaler (1980), buyers and sellers view transac- It is, however, less clear whether buyers and sellers differ in tion prices differently; for a bottle of wine, the money paid is their reactions to prices that are decided by someone else. We viewed by the buyer as a loss, whereas the money received is viewed by the seller as a gain. If this is so, then buyers should Our research extends that of Idson et al. (2000, 2004). Al- be motivated to lose as little money as possible, but sellers though they did look at buying situations, they focused on should be motivated to gain as much money as possible. Ac- how framed outcomes are evaluated on the basis of the goals cording to regulatory focus theory, the motivation to avoid that the outcomes evoked and did not consider the perspec- losses is associated with a prevention focus, and the motiva- tives that buyers brought to bear on the transactions.2 We tion to achieve gains is associated with a promotion focus build on their research in two ways. First, we study not only (Higgins, 1997, 1998). Therefore, buyers are likely to be pre- buyers but also sellers. Second, we show that because buyers vention focused, and sellers are likely to be promotion fo- and sellers approach monetary transactions from different perspectives, they react differently to framed outcomes of If buyers and sellers differ in terms of their regulatory fo- cus, then their reactions to the outcomes of any given transac- This research uses regulatory focus theory (Higgins, tion may depend on how these outcomes are framed. The ef- 1997, 1998; Pham & Higgins, 2005) as a tool to understand fects of individual differences in regulatory focus on buyer-seller differences. According to this theory, preven- responses to outcomes that are framed in terms of gains or tion focus and promotion focus are distinct self-regulatory losses were reported by Higgins, Idson, Freitas, Speigel, and systems, with the former being concerned with security and Molden (2003). Specifically, promotion-focused participants protection and the latter with advancement and accomplish- attached a higher monetary value to a product if they were ment. A prevention focus is associated with the avoidance of asked to think about what they would gain from it than when losses, whereas a promotion focus is associated with the ac- they were asked to consider what they might lose by not hav- quisition of gains. We propose that when approaching a mon- ing it. In contrast, prevention-focused individuals assigned a etary transaction, buyers are relatively prevention focused, lower value to the product in the first case than the second.
and sellers are relatively promotion focused. Therefore, buy- Similarly, Lee and Aaker (2004) found that promo- ers place a greater emphasis on loss-related frames; they feel tion-focused participants were more persuaded by an appeal better about nonlosses than about gains and worse about that was framed in terms of gains, whereas preven- losses than about nongains. Conversely, sellers place a tion-focused participants were more persuaded by an appeal greater emphasis on gain-related frames; they feel better about gains than about nonlosses and worse about nongains Thus, these considerations suggest that if buyers are typi- than about losses. These effects, however, occur only when cally prevention focused, they should place greater emphasison outcomes that are framed in terms of losses rather thangains-that is, they should feel better about not losing a given 2Idson et al.'s (2000) scenarios reveal a potential problem. Consider amount of money than about gaining it, and they should feel gains and nonlosses in their book scenarios. In the gain condition, partici- worse about losing a given amount of money than about not pants were told that the book's price was $65 but that there was a $5 discount gaining it. Conversely, if sellers are typically promotion fo- for paying in cash. Therefore, before they imagined checking their walletsfor cash, they were mentally prepared to pay $65 because that was the book's cused, they should place greater emphasis on outcomes that price. When they found cash in their wallet (i.e., got the discount), they are framed in terms of gains rather than losses; that is, they saved $5 from the $65 they had planned for. In contrast, those in the nonloss should feel better about gaining money than about not losing condition were told that the book's price was $60 but that there was a $5 pen- it, and they should feel worse about not gaining money than alty for paying by credit card. Therefore, they were mentally prepared to pay $60 for the book. When they found cash in their wallets (i.e., avoided thepenalty), they spent the $60 they had planned for. Therefore, those in the For this process to unfold, however, it is essential that buy- gain (vs. nonloss) condition may have imagined a wealth state that was ers and sellers possess sufficient motivation to process the higher by $5, leading to gains being evaluated more favorably than framed information presented in a monetary transaction.
nonlosses. A similar explanation exists for Idson et al.'s finding of losses be- Zhou and Pham (2004) found that the effects of regulatory ing evaluated more unfavorably than nongains. In our research, participants focus on financial investments emerged only when partici- in all framed outcome conditions imagine identical starting price points(e.g., $60 by cash, $65 by credit card).
pants actively engaged in self-regulation-when they exten- sively thought about their investment goals. Correspond- tion focus with the motivation to achieve gains (Higgins, ingly, we expected buyers and sellers to differ in their 1997), buyers should perceive the money at stake as more of reactions to framed outcomes only if they are motivated to an avoidable loss, whereas sellers should perceive it as more think about the outcome alternatives (i.e., different prices).
of an achievable gain. Scenarios were created by modifying Several factors could influence this motivation. Most obvi- the stimuli used by Idson et al. (2000). No framing manipula- ously, people are more likely to be motivated to think about tion was used. Participants in the buyer condition imagined outcome alternatives if the monetary difference between the alternatives is fairly large. Furthermore, in laboratory studiesin which participants imagine their reactions to situations You are in the bookstore, buying a book that you need for rather than actually experience them, participants may be your classes. The book's price is mentioned as $60 if you use motivated to think only if they have some intrinsic interest in cash and $65 if you use a credit card. You start taking out thinking (as reflected, e.g., by their need for cognition; your wallet to check whether you have enough cash. You re- Cacioppo & Petty, 1982). Both factors are considered in the mind yourself that there is a $5 difference between $60 and experiments we report. The hypotheses are as follows.
H1: For equivalent positive outcomes, buyers will experi- Participants in the seller condition imagined the following: ence more positive affect in response to a nonlossthan in response to a gain, whereas sellers will experi- You are in the bookstore, selling a book that you used last se- ence more positive affect in response to a gain than in mester. You inspect the list of buy-back prices and notice that response to a nonloss. However, these effects will oc- the bookstore pays $60 for the first edition of the book and$65 for the second edition. You start opening your backpack cur only when processing motivation is high.
to check the edition you have. You remind yourself that there H2: For equivalent negative outcomes, buyers will experi- is a $5 difference between $60 and $65.
ence more negative affect in response to a loss than inresponse to a nongain, whereas sellers will experi- Thirty-two students were approached in a university li- ence more negative affect in response to a nongain brary and asked to read a scenario. After imagining one of the than in response to a loss. However, these effects will two randomly assigned scenarios, they indicated the extent to occur only when processing motivation is high.
which they perceived the $5 difference as a loss or a gainalong a scale from 1 (a potential loss that I can avoid) to 9 (a We evaluated these hypotheses in three experiments in potential gain that I can get). As expected, buyers perceived which we used buyer and seller scenarios that evoke preven- the difference as more of a loss (M = 2.50), whereas sellers tion and promotion focus, respectively. Experiment 1 dem- perceived it as more of a gain (M = 6.31), F(1, 30) = 43.91, p onstrated that buyers feel better about not losing a given <.001. As we assumed, therefore, buyers were more preven- amount of money than about gaining it, whereas sellers feel tion focused, and sellers were more promotion focused.
better about gaining a given amount of money than about notlosing it. Experiment 2 showed that buyers feel worse aboutlosing a given amount of money than about not gaining it and that sellers feel worse about not gaining a given amount ofmoney than about losing it. Furthermore, the effects in both One hundred nine undergraduate students were randomly as- studies are contingent on participants' motivation to think signed to imagine one of four scenarios, each representing a carefully about the outcome information they are asked to different combination of transaction role (buyer vs. seller) consider. Experiment 3 replicated the buyer-seller reversals and framed outcome (gain vs. nonloss). Participants in the of the first two studies in a single experiment and showed that buyer conditions imagined themselves buying a book priced the effects generalize to an additional dependent variable, at $60 by cash and $65 by credit card. Then, participants in namely, perceptions of fairness of the business practice of the buyer-gain condition read the following: You remind yourself that if you are able to find the requiredcash in your wallet, you will get a discount of $5. You lookinto your wallet and realize that you actually have the cash.
So you will be getting the $5 discount.
In contrast, participants in the buyer-nonloss condition read Preliminary data were collected to confirm the assumption that buyers are typically prevention focused but sellers aretypically promotion focused. Because a prevention focus is You remind yourself that if you are not able to find the re- associated with the motivation to avoid losses and a promo- quired cash in your wallet, you will be charged a penalty of Affect From Positive Outcomes as a Function of Need for Cognition, Framed Outcome, and Transaction Role: Experiment 1 Means that do not share a common subscript differ at p <.05.
$5. You look into your wallet and realize that you actually framed as a gain rather than a nonloss. In contrast, participants have the cash. So you will not be charged the $5 penalty.
with low need for cognition did not differ in the affect they re-ported regardless of frame or the role they assumed. These Participants in the seller conditions imagined themselves conclusions are confirmed by a three-way interaction of need selling a book priced at $60 for the first edition and $65 for for cognition, framed outcome, and transaction role, F(1, 101) the second. Then, those in the seller-gain condition read the = 6.11, p <.05, and an interaction of framed outcome and trans- action role in an analysis of data from high need for cognitionparticipants alone, F(1, 101) = 8.75, p <.01. (The correspond- You remind yourself that if your book turns out to be the sec- ing interaction in an analysis of participants with low need for ond edition, you will get a bonus of $5. You take out the book cognition was not reliable; F < 1.) from your backpack and realize that you actually have thesecond edition. So you will be getting the $5 bonus.
In contrast, participants in the seller-nonloss condition readthe following: Experiment 1 confirmed that buyers were relatively preven-tion focused and sellers were relatively promotion focused.
You remind yourself that if your book turns out to be the first Consequently, buyers felt better about nonlosses than about edition, you will have to take a loss of $5. You take out the gains, whereas sellers felt better about gains than about book from your backpack and realize that you actually have nonlosses. Moreover, these effects emerged only when par- the second edition. So you will not be taking the $5 loss.
ticipants were motivated to process the framed information.
After reading the scenario, participants responded to the Experiment 2 investigated how buyers and sellers evalu- ate framed negative outcomes. Rather than measuring pro- dependent variable that assessed their affective judgmentsabout the outcome on a scale that ranged from 1 (not at all cessing motivation through need for cognition, we mani- good) to 9 (extremely good). Finally, they were administered pulated the difference between the two prices (i.e., themagnitude of the money at stake). The effects of this ma- the 18-item Need for Cognition Scale (Cacioppo, Petty, &Kao, 1984). Individuals high (vs. low) in need for cognition nipulation are more likely to correspond to the motivationaldifferences that exist between buyers and sellers outside the should be more motivated to process information because they engage in and enjoy thinking (Cacioppo & Petty, 1982).
Three factors were manipulated: (a) price difference between Responses to the need-for-cognition items were summed.
the alternative outcomes (low vs. high), (b) framed outcome Scores ranged from 46 to 152, and participants were divided (nongain vs. loss), and (c) transaction role (buyer vs. seller).
into groups above and below the median (108). Participants' The amount at stake was $5 ($60 vs. $65) in the low price dif- affective reactions were then analyzed as a function of need ference condition and $25 ($150 vs. $175) in the high price for cognition (low vs. high), framed outcome (gain vs.
difference condition.3 Apart from this motivation manipula- nonloss), and transaction role (buyer vs. seller). Data areshown in Table 1.
In line with Hypothesis 1, buyers with high need for cogni- 3Even though all participants in Experiment 1 were in the $5 condition, tion reported more positive affect if the outcome was framed as the buyer-seller differences were significant only for the high need for cog- a nonloss rather than a gain, whereas sellers with high need for nition condition not for the combined data set. Therefore, Experiment 2 cognition reported more positive affect if the outcome was treated $5 (relative to $25) as a low-motivation condition.
tion and the fact that the outcomes were negative (rather than .01, but not reliable in an analysis of data for low price dif- positive), the scenarios were the same as those used in Exper- ference participants (F < 1).
iment 1. For buyers, the negative outcome was framed as ei-ther a nongain (i.e., not getting a discount) or a loss (i.e., pay-ing a penalty). Similarly, for sellers the negative outcome was framed as either a nongain (i.e., not getting a bonus) or a loss(i.e., taking a loss).
This experiment investigated buyer-seller differences in One hundred eighteen undergraduate students were ran- high-motivation conditions alone (i.e., high price difference).
domly assigned to one of the eight experimental conditions.
We included both positive and negative outcomes to test After reading the scenario, participants reported their affec- whether buyer-seller reversals of earlier experiments would tive reactions to the outcome on a scale that ranged from 1 replicate. In this regard, Experiment 2 revealed stronger neg- (not at all bad) to 9 (extremely bad). Then, to confirm the mo- ative affect for buyers than for sellers, but Experiment 1 did tivational differences we assumed, we asked participants to not reveal any difference for positive affect. In Experiment 3, rate, on three 9-point scales, the extent to which they were in- we determined whether this asymmetry would reemerge.
terested, careful, and paying attention while reading the sce- We also introduced a methodological refinement; specifi- nario. Responses to these items were combined to form a sin- cally, we constructed similar book edition scenarios for both the buyer and seller conditions. This is in contrast to earlierstudies, in which the price difference for buyers was based onpayment mode, but the price difference for sellers was based The manipulation of motivation was successful. Participants Finally, we investigated the effects of framed outcome and reported more motivation to process information when the transaction role on an additional dependent variable, namely, price difference was high than when it was low (Ms = 6.14 vs.
perceived fairness regarding a business establishment having 5.58), F(1, 110) = 4.55, p <.05. None of the other terms in the two different prices for a product. Fairness perceptions are model was significant (all ps >.20).
known to be more favorable if the inequality is to the individ- Analyses of participants' affective reactions indicated ual's advantage rather than disadvantage (see Xia, Monroe, that negative affect was stronger when the price difference & Cox, 2004, for a review). In this context, individuals was high rather than low (Ms = 5.66 vs. 4.73), F(1, 110) = should feel more advantaged as the price outcome becomes 6.16, p <.05. Furthermore, buyers expressed stronger nega- more positive but more disadvantaged as the price outcome tive affect than sellers did (Ms = 6.65 vs. 3.74), F(1, 110) = becomes more negative. Therefore, we expected individuals' 59. 69, p <.001. More relevant to our hypotheses was an perceptions of fairness to reveal a pattern similar to that for interaction of price difference, framed outcome, and trans- affect. Specifically, buyers should perceive fairness to be action role, F(1, 110) = 5.19, p <.05, the nature of which is higher when they perceive a positive outcome as a nonloss, conveyed in Table 2. In line with H2, when the price differ- whereas sellers should perceive it to be higher when they per- ence was high, buyers reported more negative affect if the ceive the outcome as a gain. Correspondingly, buyers should outcome was framed as a loss rather than a nongain, but perceive fairness to be lower when they perceive a negative sellers reported more negative affect if the outcome was outcome as a loss, but sellers should perceive it to be lower framed as a nongain rather than a loss. In contrast, when when they perceive the outcome as nongain.
the price difference was low, affect ratings for buyers andsellers did not vary by framed outcome. This is confirmed by the interaction between framed outcome and transactionrole, which is significant in an analysis of data for high Preliminary data were collected to confirm that the scenarios price difference participants alone, F(1, 110) = 10.50, p < to be used in the study evoked the regulatory focus differ- Affect From Negative Outcomes as a Function of Price Difference, Framed Outcome, and Transaction Role: Experiment 2 Means that do not share a common subscript differ at p <.05.
ences we assumed. We created two book edition scenarios, respectively), F(1, 32) = 7.09, p <.05. In addition, the relative one involving buying and the other involving selling. No promotion focus of sellers and prevention focus of buyers framing manipulation was used. Participants in the buyer was reflected on the measure of brand preferences (Ms = 4.12 vs. 5.89 for sellers vs. buyers, respectively), F(1, 32) = 5.83,p <.05. Consistent with our assumption, the buyer and seller You are in the bookstore, buying a book that you need this se- mester. You inspect the list of buying prices and notice that the bookstore charges $100 for the first edition of the bookand $125 for the second edition. To check the edition youneed, you start opening your backpack to take out your sylla- bus. You remind yourself that there is a $25 difference be- One hundred seventy-one undergraduate students were ran- domly assigned to one of the eight experimental conditions.
Participants in the seller condition imagined the following: Participants in the role of a buyer first imagined themselvesbuying a book priced at $100 for the first edition and $125 forthe second edition. Then, those in the buyer-gain condition You are in the bookstore, selling a book that you used last se-mester. You inspect the list of buy-back prices and notice that the bookstore pays $100 for the first edition of the book and$125 for the second edition. To check the edition you have, Therefore, there is a rebate of $25 for the first edition. To you start opening your backpack to take out your book. You check the edition you need, you start opening your backpack remind yourself that there is a $25 difference between $100 to take out your syllabus. You remind yourself that if the re- quired book turns out to be the first edition, you will receive arebate of $25. You look at the syllabus and realize that you Thirty-four undergraduate students were randomly as- actually need the first edition. So you get the $25 rebate and signed to read one of the two scenarios. They then indicated buy the book for $100 rather than $125.
the extent to which they perceived the $25 difference as a lossor a gain along a scale that ranged from 1 (a potential loss Participants in the buyer-nongain condition imagined the that I can avoid) to 9 (a potential gain that I can get).
same scenario, except that they realized that they needed the Then, to examine whether the regulatory focus of buyers second edition. Therefore, they did not get the $25 rebate and and sellers is reflected in an unrelated context, we asked partic- bought the book for $125 rather than $100. Those in the ipants to take part in a purportedly different study about brand buyer-loss condition imagined the following: preferences (Zhou & Pham, 2004). They read descriptions ofthree pairs of brands and reported their preferences along a Therefore, there is a surcharge of $25 for the second edition.
scale from 1 (prefer Brand A) to 9 (prefer Brand B). In the first To check the edition you need, you start opening your back- pair (grape juices), Brand A was rich in vitamin C and iron, pack to take out your syllabus. You remind yourself that if the thus promoting high energy (promotion benefit), and Brand B required book turns out to be the second edition, you willhave to pay a surcharge of $25. You look at the syllabus and was rich in antioxidants, thus reducing the risk of cancer and realize that you actually need the second edition. So you pay heart diseases (prevention benefit). In the second pair (tooth- the $25 surcharge, and buy the book for $125 rather than paste), Brand A was particularly good for cavity prevention (prevention benefit), and Brand B was particularly good fortooth whitening (promotion benefit). In the third pair (cars), Participants in the buyer-nonloss condition imagined the Brand A focused primarily on style and performance (promo- same scenario, except that they realized that they needed the tion benefit), and Brand B focused primarily on safety and ac- first edition. Therefore, they avoided the $25 surcharge and cident protection (prevention benefit). Responses to the items bought the book for $100 rather than $125.
were first coded so that higher ratings indicated a greater pre- Participants in the role of a seller first imagined them- vention rather than promotion focus, and then we averaged selves selling a book priced at $100 for the first edition and them to form a composite measure (α =.66).4 $125 for the second edition. Then, those in the seller-gain As expected, sellers were more likely than buyers to per- ceive the $25 difference as an achievable gain rather than anavoidable loss (Ms = 7.06 vs. 4.77 for sellers vs. buyers, Therefore, there is a bonus of $25 for the second edition. Tocheck the edition you have, you start opening your backpackto take out your book. You remind yourself that if the book 4The first two items were from Zhou and Pham (2004). They also used a you have turns out to be the second edition, you will receive a third choice that was between snacks: chocolate cake versus fruit salad. We bonus of $25. You look at the book and realize that you actu- replaced this item with that of cars because we wanted the third choice to be ally have the second edition. So you get the $25 bonus, and about brands as well, rather than different products, and because Zhou and sell the book for $125 rather than $100.
Pham found weak significance for snacks (p =.19).
Participants in the seller-nongain condition imagined the come, framing, and transaction role. Data pertaining to these same scenario, except that they realized that they had the first effects are summarized in the top half of Table 3. As in Ex- edition. Therefore, they did not get the $25 bonus and sold periment 1, buyers reported more positive affect if the out- the book for $100 rather than $125. Those in the seller-loss come was framed as a nonloss rather than a gain, whereas sellers reported more positive affect if the outcome wasframed as a gain rather than a nonloss. As in Experiment 2, Therefore, there is a deduction of $25 for the first edition. To buyers reported more negative affect if the outcome was check the edition you have, you start opening your backpack framed as a loss rather than a nongain, whereas sellers re- to take out your book. You remind yourself that if the book ported more negative affect if the outcome was framed as a you have turns out to be the first edition, you will have to take nongain rather than a loss. These conclusions are confirmed a deduction of $25. You look at the book and realize that you by a three-way interaction of outcome, frame, and transac- actually have the first edition. So you take the $25 deduction, tion role, F(1, 163) = 30.69, p <.001; an interaction of frame and sell the book for $100 rather than $125.
and transaction role in an analysis of data from posi-tive-outcome participants alone, F(1, 163) = 13.36, p <.001; Those in the seller-nonloss condition imagined the same and an interaction of frame and transaction role in an analysis scenario, except that they realized that they had the second of data under negative outcome conditions alone, F(1, 163) = edition. Therefore, they avoided the $25 deduction and sold The interaction of outcome and transaction role was also After reading the scenario, participants reported their af- significant, F(1, 63) = 15.53, p <.001. Specifically, buyers fective reactions to the outcome on a scale that ranged from reported more negative affect than sellers (-3.74 vs. -1.43, -9 (very bad) to +9 (very good). Then, they reported per- respectively, F(1, 163) = 115.52, p <.001, but did not differ ceived fairness about the policy of having a $25 difference from sellers in their response to positive outcomes (7.58 vs.
between editions, on a scale that ranged from 1 (not at all 6.77, respectively; p >.10). Note that this asymmetry was fair) to 9 (very fair).
also evident in Experiments 1 and 2. The data in Table 3 sug-gest that the difference between buyers and sellers was par-ticularly evident in the negative outcome, loss framing condi- tion (-4.62 vs. 0.00 for buyers vs. sellers, respectively). This We used a 2 (outcome: positive vs. negative) × 2 (frame: gain difference was also pronounced in comparable conditions of related vs. loss related) × 2 (transaction role: buyer vs. seller) Experiment 2 (8.38 vs. 3.00, respectively, when the price dif- between-subjects factorial design. For ease of data analysis, ference was high; see Table 2). We consider this difference we chose to have two levels of outcome and two levels of further in the General Discussion section.
frame rather than four levels of framed outcome: (a) gain, (b)nonloss, (c) nongain, and (d) loss. However, to maintain con- sistency with the earlier experiments, we interpret our results lower for negative than for positive outcomes (4.47 vs. 5.11, respectively), F(1, 163) = 4.32, p <.05. Furthermore, theywere lower for buyers than for sellers (4.34 vs. 5.24, respec- tively), F(1, 163) = 8.50, p <.01. More relevant to our hy- favorable affective reactions to positive outcomes than to potheses was an interaction of outcome, frame, and transac- negative ones (Ms = 7.17 vs. -2.59), F(1, 163) = 612.26, p < tion role, F(1, 163) = 17.49, p <.001, the nature of which is .001. Of more importance are the interactive effects of out- conveyed in the bottom half of Table 3. For positive out- Affect and Fairness as a Function of Framed Outcome and Transaction Role: Experiment 3 Means for each dependent variable that do not share a common subscript differ at p <.05. The comparison of buyer-nongain and buyer-loss cells for fairness (4.48 vs. 3.43) is marginally significant (p <.10).
comes, buyers perceived higher fairness when the outcome (2004) suggested that the endowment effect is likely to be was framed as a nonloss versus a gain, whereas sellers per- less pronounced when sellers are certain that they wish to ceived higher fairness when the outcome was framed as a sell. Future research could try to understand whether the cer- gain versus a nonloss. For negative outcomes, buyers per- tainty of buying and selling is critical to the difference be- ceived lower fairness when the outcome was framed as a loss tween endowment effects and the effects we observed in this versus a nongain, whereas sellers perceived lower fairness when the outcome was framed as a nongain versus a loss.
Our experiments also revealed some unexpected findings.
This was confirmed by the interaction of frame and transac- For example, buyers generally experienced more unfavor- tion role that was significant in an analysis of data from posi- able reactions than sellers to negative outcomes, but they ex- tive-outcome participants alone, F(1, 163) = 9.41, p <.01, as perienced similar reactions to positive outcomes. Because well as from negative-outcome participants alone, F(1, 163) buyers are prevention focused, they try to avoid negative out- comes. Furthermore, the loss condition refers to a situation inwhich the frame is negative (e.g., penalty) and the outcome isalso negative (e.g., paid penalty). Therefore, the buyer-loss cell represents a unique combination of all things negative,leading to more intense negative affect. Although the Three experiments offer support for our theorizing. Spe- seller-gain condition represents an equivalent combination cifically, when approaching monetary transactions, buyers of all things positive, the generally lower impact of positive are prevention focused, and sellers are promotion focused.
information on judgments (Skowronski & Carlston, 1989) This difference in regulatory focus causes buyers and sellers may have contributed to the asymmetry we observed.
to react differently to framed outcomes, but only when indi- One interesting issue is whether buyers are always pre- viduals possess sufficient processing motivation. Buyers feel vention focused and sellers are always promotion focused.
better about nonlosses, but sellers feel better about gains, and We studied situations in which individuals encounter plausi- buyers feel worse about losses but sellers feel worse about ble book prices. However, prices might sometimes be sur- nongains. A similar reversal arises for fairness perceptions.
prising. Consider a person selling her home. She thinks that The evidence that buyers and sellers differ in their regula- her house is worth $100,000, but a house inspection reveals tory focus and hence in their reactions to framed outcomes, problems because of which she is likely to get only between yields interesting implications for research in the areas of $20,000 and $30,000. To her, receiving either price might buyer-seller differences, regulatory focus, and framed seem like a loss and, therefore, she might not be promotion focused. Future research could try to delineate the bound-aries of the regulatory focus differences we propose.
Implications for Researchon Buyer-Seller Differences Implications for Research on Regulatory Focus Our results complement prior research on buyer-seller dif- It is well known that prior regulatory focus, either situational ferences (e.g., Kahneman et al., 1990) that shows that buyers or chronic, can influence judgments. We show something dif- and sellers differ when they are asked to decide on the price ferent. Consistent with recent research (Zhou & Pham, they would consider. We show how buyers and sellers differ 2004), we demonstrated that even the judgment context itself in their affective reactions to prices decided by someone else.
(e.g., buying vs. selling) can evoke regulatory foci. Further- Furthermore, by showing that the two also differ in their per- more, we show that the consequent effects on framed out- ceptions of fairness, we add to the prior research that has comes occur only when processing motivation (e.g., need for studied fairness only from the perspective of a buyer dealing cognition) is high. This complements the finding that regula- with a business establishment (see Xia et al., 2004, for a re- tory focus effects might be weaker when need for cognition is high (Evans & Petty, 2003). Specifically, a match between This research should be considered in the context of en- self-guide (i.e., desired end-states associated with regulatory dowment effects (Kahneman et al., 1990); that is, sellers tend focus) and message frame was found to have a weaker effect to require more money to sell an object they own than they on individuals high in need for cognition, presumably be- would normally pay in order to buy it. Although this general cause they did not need the extra motivation required to pro- difference may have contributed to buyer-seller differences cess information. Perhaps the difference resides in whether in our studies, it cannot account for our findings. Even if sell- the regulatory focus is chronic (as in Evans & Petty, 2003) or ers were reluctant to part with their products, it would not ex- situationally induced (as in our studies). High processing plain why they felt better about gains than about nonlosses.
motivation might be required for the active engagement of in- In fact, it is possible that endowment effects do not arise at all duced self-regulation (Zhou & Pham, 2004).
under conditions in which buyers and sellers have already de- Our results are based on the notion that promotion-focused cided to buy and sell, respectively. Simonson and Drolet individuals place greater emphasis on gain-related frames, and less emphasis on loss-related frames than preven- Cacioppo, J. T., & Petty, R. E. (1982). The need for cognition. Journal of tion-focused individuals (Higgins, 1998). However, it is possi- Personality and Social Psychology, 42, 116-131.
Cacioppo, J. T., Petty, R. E., & Kao, C. F. (1984). The efficient assessment of ble that a match between regulatory focus and frame might need for cognition. Journal of Personality Assessment, 48, 306-307.
have led to a regulatory fit experience, which in turn influ- Carmon, Z., & Ariely, D. (2000). Focusing on the forgone: How value can enced the affect of buyers and sellers (Higgins, 2000, 2002, appear so different to buyers and sellers. Journal of Consumer Research, Higgins et al., 2003). Specifically, our buyer-seller reversals might have been driven by such a regulatory fit between buy- Evans, L. M., & Petty, R. E. (2003). Self-guide framing and persuasion: Re- sponsibly increasing message processing to ideal levels. Personality and ers' prevention focus and loss-related frames and between Social Psychology Bulletin, 29, 313-324.
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cessing the framed information. We demonstrate that two as- (2003). Transfer of value from fit. Journal of Personality and Social Psy- pects of buyers and sellers-(a) regulatory focus and (b) mo- tivation to process information-influence evaluations of Idson, L. C., Liberman N., & Higgins, E. T. (2000). Distinguishing gains from nonlosses and losses from nongains: A regulatory focus perspective on hedonic intensity. Journal of Experimental Social Psychology, 36, Our results were based on scenario-based experiments. It is possible that real world settings, such as those in which real Idson, L. C., Liberman, N., & Higgins, E. T. (2004). Imagining how you'd money is used, might dampen the results; that is, participants' feel: The role of motivational experiences from regulatory fit. Personality affect might be determined more by the absolute amount of and Social Psychology Bulletin, 30, 926-937.
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Our contributions to this article are equal. We thank Jane Xia, L., Monroe K. B., & Cox, J. L. (2004). The price is unfair! A conceptual Ebert, Joan Meyers-Levy, Akshay Rao, and L. J. Shrum for framework of price fairness perceptions. Journal of Marketing, 68, 1-15.
their comments on earlier drafts of this manuscript. We also Zhou, R., & Pham, M. T. (2004). Promotion and prevention across mental thank the reviewers for their constructive criticism.
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