The Effects of Delay and Probabilistic Discounting on Green Consumerism

Abstract

People have a tendency to discount outcomes that are delayed or probabilistic. In other words, people will sacrifice larger benefits for smaller benefits that are immediate or certain. For many environmentally-friendly (“green”) products, the financial benefits are both delayed and probabilistic. The current study examined how delay and probability, as well as frame and magnitude, influenced consumers’ decisions when comparing a conventional and green product. Participants were recruited from Amazon’s Mechanical Turk and completed one of two experiments. In each experiment participants chose between a conventional product (low initial cost, high operating cost) and green product (high initial cost, low operating cost). Magnitude was manipulated by randomly assigning participants to a light bulb (low magnitude) or water heater (high magnitude) condition. Within each magnitude condition, promotional messages highlighted the increased operating cost of the conventional product (loss frame) or decreased operating cost of the green product (gain frame). Probability was manipulated in experiment one and inferred by the participant in Experiment 2. Results supported the recent finding that delay and probability interact. When probabilities of savings were high, participants were more likely to select the green product. This finding occurred whether probabilities were manipulated (Experiment 1) or inferred (Experiment 2). Framing and magnitude effects were inconsistent across experiments. Marketers promoting green products should take steps to reduce perceived risk associated with green products.