Special Session Summary the Effects of Mood and Arousal on Consumer Decision Making

Citation:

Angela Y. Lee (1998) ,"Special Session Summary the Effects of Mood and Arousal on Consumer Decision Making", in AP - Asia Pacific Advances in Consumer Research Volume 3, eds. Kineta Hung and Kent B. Monroe, Provo, UT : Association for Consumer Research, Pages: 32-33.

Asia Pacific Advances in Consumer Research Volume 3, 1998      Pages 32-33

SPECIAL SESSION SUMMARY

THE EFFECTS OF MOOD AND AROUSAL ON CONSUMER DECISION MAKING

Angela Y. Lee, Northwestern University, U.S.A.

Past findings in the areas of affect and emotions show that the two dimensions of emotional statesBvalence and arousalBplay an important role in influencing judgments and behavior. Product judgments, for instance, may reflect a mood-congruent effect in which case people in a positive mood are more likely to evaluate the product favorably while those in a negative mood are more likely to make a less favorable evaluation; or happy people may be more averse to losses and hence may engage in more risky behaviors to minimize their loss. The objective of the session was to examine how consumers’ decision making and behavior are influenced by different mood and/or arousal states.

The first paper by Hsu and Liu investigates the effects of positive and negative mood on perceived transaction value of price promotions. They predicted that consumers would perceive the advantage of a price deal in a mood-congruent manner in that happy consumers would view the price promotions as a much better deal than sad consumers. The results of a 2 (mood) x 2 (product) x 4 (discount level) study were consistent with their hypotheses.

In the second paper, Adaval and Monroe manipulated happy and sad moods and examined the effects of mood states and gender on the upper and lower limits of the participants’ acceptable price range for products whose quality is either mood-congruent (e.g., happy mood-consistent quality) or -incongruent (e.g., happy mood-unreliable quality). Their results showed that there may be a gender difference in the perception of an acceptable lower bound for mood-congruent vs. -incongruent quality products. Specifically, the results suggest that males might be trying to minimize losses whereas females might be maximizing gains.

In the third paper, Nordhielm and Lee investigated whether different arousal states may have an impact on individuals’ attitudes towards risk when attempting to minimize loss. Arousal was manipulated by two hemispheric activation tasks, followed by a choice task that involved choosing between a sure thing vs. a gamble to recover a loss in some shares that they had either purchased or inherited. Initial results indicated that both arousal and the source of the endowment (i.e., whether the shares were purchased or inherited) affect individuals’ risk-taking behavior.

 

THE ROLE OF MOOD IN PRICE PROMOTIONS

Chung-kue Hsu, University of Illinois at Urbana-Champaign

Ben S. Liu, University of Illinois at Urbana-Champaign

This study investigated mood effects on perceived transaction value in the context of price promotions. In the consumer behavior literature, mood effects have been identified to merge on service encounters, point-of-purchase stimuli and communications. Nonetheless, to the best of our knowledge, the effects of moods on price promotions have not been examined.

Gardner (1985) concludes, in her review paper, that mood states appear to bias evaluation and judgments in a mood congruent direction. Accordingly, consumers’ evaluations of price promotions are expected to be consistent with their moods. Specifically, we are interested in understanding the mechanism by which mood may influence consumers’ responses to price promotions. Grewel, Monroe, and Krishnan’s (1998) model of the effects of comparative price advertising on consumers’ value perceptions provides a useful framework. One of their findings is that consumers’ perception of transaction value is influenced by the advertised selling price. As perceived transaction value, by definition, involves consumers’ assessment of psychological satisfaction or pleasure from taking advantage of a price deal, it is likely that consumers’ subjective mood states can either enhance or decrease the level of psychological satisfaction. Thus, we propose that mood will influence consumers’ evaluations of price promotions through perceived transaction value in a mood congruent direction. That is, when encountering price promotions, buyers in a positive mood, as opposed to buyers in a negative mood, will perceive a greater transaction value. Moreover, we hypothesize that the effect of discount levels on perceived transaction value will be moderated by buyers’ mood states.

A two (mood) by four (discount level) between-subject experiment replicated across two products was conducted to investigate the effects of mood on consumers’ perceived transaction value. Our results support these hypotheses. In addition, we also find asymmetric moderating effects on discount levels in positive mood state vs. in negative mood state.

 

THE EFFECTS OF MOOD ON PRICE ACCEPTABILITY: MINIMIZING LOSSES OR MAXIMIZING GAINS?

Rashmi Adaval, University of Illinois at Urbana-Champaign

Kent B. Monroe, University of Illinois at Urbana-Champaign

The effects of mood on how people encode price information and their subsequent reactions to negative product category information were investigated in an experiment. Participants in happy and sad moods first looked through a magazine that contained information about prices of various product categories. They then read two reports (ostensibly from Consumer Reports magazine) suggesting that the brands in the target product category were either fairly reliable and of good quality or that wide product quality variations were to be expected. This was followed by a price categorization task where participants sorted through a number of price tags and put them into piles of acceptable and unacceptable prices.

Results show that the upper and lower limits of the acceptable price range were influenced in different ways. More specifically, in mood-congruent conditions (positive moodBhigh quality expected and negative moodBlow quality expected) the lower limit of the price range was lower for males but higher for females compared to mood-incongruent conditions. This suggests that males were trying to minimize losses but women were maximizing gains by focusing on how to get a better product by paying more. The upper limit of the acceptable price range showed that when negative quality was expected, participants were less willing to pay more and this effect was not contingent on gender.

 

THE DIFFERENTIAL IMPACT OF HEMISPHERIC PRIMING AND THE ENDOWMENT SOURCE ON RISKY DECISION MAKING

Christie Nordhielm, Northwestern University

Angela Y. Lee, Northwestern University

Extant literature on risky decision making suggests that individuals are more likely to undertake risky choices to recover a loss than to benefit from potential gain. This loss aversion effect has been used to explain the endowment effect, a term used todescribe the fact that people demand more money to give something up than they are willing to pay to acquire it. Research on the effects of emotional states on risky decision making also suggests that different mood and/or arousal states often invoke different attitudes towards risks.

The present research proposes to examine if behavior towards risk is affected by the source of endowment under different emotional states. It is posited that an endowment actively pursued and acquired by the individual should be valued more and hence the loss aversion effect would be greater, compared to when the endowment has been simply given to the individual. It is thus hypothesized that when the endowment is acquired versus inherited, its loss would be considered to be greater, and hence the individual is more likely to engage in risky behavior to recover it. Yet this effect may be moderated by the emotional states that the individual happens to be in. In particular, uncertainty may be associated with high arousal; hence individuals in a high arousal condition may be more risk averse (to reduce uncertainty) than those in a low arousal condition. However, a loss may be perceived to be larger by individuals in an aroused condition (Mano 1994), who would therefore be more likely to engage in risky behavior to avoid the loss. A study was conducted to test these hypotheses.

According to Heller (1990), an activation of the right hemisphere is correlated with high arousal states while an activation of the left hemisphere is correlated with low arousal states. Participants in a study were asked to either engage in a word generation task (to activate their left hemisphere) or a cube rotation task (to activate their right hemisphere). They were then presented with a decision task in which they were asked to choose between either a sure thing or a gamble regarding a stock they had either bought or inherited. The data show that hemispheric priming has a differential impact on people’s risk taking behavior to recover their loss of the stock which they had purchased versus inherited. These results suggest that both arousal and the source of the endowment influence decision making under uncertainty.

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