When Avoidable Losses Are Perceived As Gains: Repair Costs and Their Effects in New Product Purchases

Andrew Gershoff, University of Michigan, USA
Beatriz Pereira, University of Michigan, USA
Paying to repair a broken product may be perceived as a loss to consumers because doing so only restores benefits without providing any new advantage. Yet paying to repair may be avoided when a consumer chooses to replace the product. This research shows that when consumers do replace, the avoided repair price is perceived as a gain, increasing willingness to pay for the replacement. Two experiments show willingness to pay for a replacement depends on how seriously repair is considered and whether the repair decision is made in a separate stage from the replacement choice.
[ to cite ]:
Andrew Gershoff and Beatriz Pereira (2010) ,"When Avoidable Losses Are Perceived As Gains: Repair Costs and Their Effects in New Product Purchases", in NA - Advances in Consumer Research Volume 37, eds. Margaret C. Campbell, Jeff Inman, and Rik Pieters, Duluth, MN : Association for Consumer Research, Pages: 804-805 .