Lecture 8

Question 1

Product Primacy vs. Price Primacy

Answer 1

Product Primacy
a consumer is presented the product before the price first
- product first
- process reward first

Price Primacy
a consumer is presented the price before the product
- price first
- process cost first

Question 2

Knutson et al (2007) What factors influence whether people choose to make purchases?

Answer 2

• anticipating reward/something of value
• integration value and cost
• anticipating loss and regulation of behaviour

Question 3

Result : Brain activation related to decision to purchase

Answer 3

Nucleus Accumbens (Nacc)
- start to process preference/reward

Medial Prefrontal Cortex (MFPC)
- Process preference
- Start to process cost

Insula
- Process preference
- Start to process cost
- Activation related to decision not to purchase

Question 4

Possible functions related to decision to purchase

Answer 4

Nucleus Accumbens (Nacc)
- related to pleasure
- anticipation of gains

Medial Prefrontal Cortex (MFPC)
- Executive funciton
- integration of gains and losses

Insula
- related to decision-making
- emotional/social regulation
- anticipation of loss

Question 5

Karmarkar et al (2015)
Does price or product primacy influence whether people purchase a utilitarian product?

Answer 5

people are more willing to purchase a utilitarian product If price is presented before product

Question 6

Sunk Cost Effects

Answer 6

“A greater tendency to continue an endeavor once an investment in money, effort or time has been made. “(Arkes & Blumer, 1985)

Question 7

Two types of resources

Answer 7

Money
- Can be measured on an interval scale
- Can be saved
- People keep track of money (Soman, 2001)

Time
- Can be measured on an interval scale
- Cannot be saved
- People do not keep track of time (Soman, 2001)

Question 8

Is there a sink cost effect for time?

Answer 8

• there is no sunk-cost effect for time
• mental accounting for time and money are dissimilar