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American Economic Review: Vol. 100 No. 4 (September 2010)

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Pavlovian Processes in Consumer Choice: The Physical Presence of a Good Increases Willingness-to-Pay

Article Citation

Bushong, Benjamin, Lindsay M. King, Colin F. Camerer, and Antonio Rangel. 2010. "Pavlovian Processes in Consumer Choice: The Physical Presence of a Good Increases Willingness-to-Pay." American Economic Review, 100(4): 1556-71.

DOI: 10.1257/aer.100.4.1556

Abstract

This paper describes a series of laboratory experiments studying whether the form in which items are displayed at the time of decision affects the dollar value that subjects place on them. Using a Becker-DeGroot auction under three different conditions — (i) text displays, (ii) image displays, and (iii) displays of the actual items — we find that subjects' willingness-to-pay is 40-61 percent larger in the real than in the image and text displays. Furthermore, follow-up experiments suggest the presence of the real item triggers preprogrammed consummatory Pavlovian processes that promote behaviors that lead to contact with appetitive items whenever they are available. (JEL C91, D03, D12, D87)

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Authors

Bushong, Benjamin (CA Institute of Technology)
King, Lindsay M. (CA Institute of Technology)
Camerer, Colin F. (CA Institute of Technology)
Rangel, Antonio (CA Institute of Technology)

JEL Classifications

C91: Design of Experiments: Laboratory, Individual
D03: Behavioral Economics: Underlying Principles
D12: Consumer Economics: Empirical Analysis
D87: Neuroeconomics


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