Four experiments tested the novel hypothesis that ritualistic behavior potentiates and enhances ensuing consumption—an effect found for chocolates, lemonade, and even carrots. Experiment 1 showed that participants who engaged in ritualized behavior, compared with those who did not, evaluated chocolate as more flavorful, valuable, and deserving of behavioral savoring. Experiment 2 demonstrated that random gestures do not boost consumption as much as ritualistic gestures do....

All income increases a person's absolute wealth, but consumption decisions may be based more heavily on perceived changes in wealth. Change is computed by comparing a current state with a former state, and we predicted that people would be more likely to spend income framed as a gain from a current wealth state than income framed as a return to a prior state. Four experiments...

Research suggests that individuals mentally track the costs and benefits of a consumer transaction for the purpose of reconciling those costs and benefits on completion of the transaction (Prelec and Loewenstein 1998; Thaler 1980, 1985). In transactions where costs precede benefits, this can lead to a systematic and economically irrational attention to sunk costs (Arkes and Blumer 1985; Thaler 1980). In this article, we consider...

Aubiquitous feature of even the fastest self-service technology transactions is the wait. Conventional wisdom and operations theory suggest that the longer people wait, the less satisfied they become; we demonstrate that because of what we term the labor illusion, when websites engage in operational transparency by signaling that they are exerting effort, people can actually prefer websites with longer waits to those that return instantaneous...

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...

The sunk cost effect is manifested in a greater tendency to continue an endeavor once an investment in money, effort, or time has been made. Evidence that the psychological justification for this behavior is predicated on the desire not to appear wasteful is presented. In a field study, customers who had initially paid more for a season subion to a theater series attended more plays...

We study how decision makers choose when faced with multiple plays of a gamble or investment. When evaluating multiple plays of a simple mixed gamble, a chance to win x or lose y, subjects show a sensitivity to the amount to lose on a single trial, holding the distribution of returns for the portfolio constant; that is, they display “myopic loss aversion.” Many subjects who...

This paper examines the importance of the context in which medical alternatives are presented to individuals. In a series of experiments, subjects were given information and asked to make choices in hypothetical medical situations. In each experiment, probability information was presented in either a positive or a negative frame. One study demonstrated that the probability that a subject would elect surgery for a terminal liver...

The duration of ownership has been shown to increase the valuation of items that people currently own as well as items they have owned in the past, a phenomenon termed the “length-of-ownership effect.” We hypothesize that the duration of exposure to an item will foster increased pre-ownership attachment to an item and increased valuations in a manner similar to duration of actual ownership. We examine...

We propose that buying- and selling-price estimates reflect a focus on what the consumer forgoes in the potential exchange and that this notion offers insight into the well-known difference between those two types of value assessment. Buyers and sellers differ not simply in their valuation of the same item but also in how they assess the value. Buyers tend to focus on their sentiment toward...