Consumable Rewards Research Articles

Past Imperfect or Present Perfect? How Dynamic Ranks Influence Consumer Perceptions

While ranked lists are ubiquitous, research on how consumers interpret changes in the rank of an entity is limited. Across seven studies (including a study with web data and a Google AdWords field experiment), this investigation shows that consumers reward a rise in rank and penalize a decline in rank, and that psychological momentum associated with the rank change information underlies these effects. Further, rewarding a rise and penalizing a fall are moderated by consumers’ perception of the reason for the rank change, the nature of the entity, and the nature of the ranked list. The impact of changing rank is attenuated when the rank change is attributed to other entities on the list, when entities are considered nonmalleable, or when the list is updated more frequently. The investigation also identifies a specific case in which consumers do not extrapolate the direction of a change in rank into the future. In addition to contributing to theory, this research provides actionable insights and demonstrates practical ways in which managers can communicate dynamic ranks to enhance the benefit of an improvement in rank or attenuate the penalty from a decline.

The (in)ability of consumers to perceive greenwashing and its influence on purchase intent and willingness to pay

Background: Environmental concerns have led to consumers increasingly being willing to pay a premium for environmentally friendlier products. Unfortunately, this has led to the practice ‘greenwashing’, which yields handsome financial rewards. Consumers are not sufficiently aware of greenwashing, and little is known about the effects of such knowledge.Aim: This article explores how consumers who become aware of greenwashing, respond in terms of purchase intent and willingness to pay.Setting: The population was South African middle- to upper-income consumers. The findings were based on 120 responses.Methods: The study used a 2 × 2 experimental design in which greenwashing knowledge and greenwashing presence were manipulated.Results: We found that consumers reward greenwashing when it is undetected. Educating consumers about environmental issues does not develop their ability to identify greenwashing. In contrast, consumers who are educated about greenwashing and become aware of it, penalise such products through what we term a ‘greenwash penalty’. We define the greenwash penalty as the shift in consumers’ willingness to pay a premium for a product when they become aware of greenwashing. Purchase intent (PI) is also impacted by greenwashing.Conclusion: Companies often try to drive awareness of environmental problems. Our research shows that such initiatives reward all companies that make claims, even when such claims are false. Companies that sell truly green products must educate consumers about the potential harm of misleading information. Once consumers are able to spot greenwashing attempts, companies that sell real green products should then provide true and transparent information about their own products.

Selfless First Movers and Self‐Interested Followers: Order of Entry Signals Purity of Motive in Pursuit of the Greater Good

When do brands get credit for contributing to the greater good? Prior research has shown that consumers reward brands for prosocial initiatives (e.g., corporate philanthropy, social responsibility, cause marketing) in line with the perceived purity of their motives. We report four experiments demonstrating that consumers interpret the order in which brands launch prosocial initiatives as a signal of their underlying motivations for doing good. Whereas prosocial first movers appear to care genuinely about the causes they support, prosocial followers (i.e., those that imitate the prosocial actions of other brands) typically seem to have more selfish intentions, even if their initiatives have an equal or greater social impact. This discrepancy in perceived motives, in turn, serves as an additional source of first mover preference, above and beyond previously studied first mover effects and unique to greater good marketing contexts. It also leads consumers to reward followers for launching more original prosocial initiatives, even if these seem less impactful for society. These findings bridge literatures on prosocial behavior and entry order, and they offer practical insight for brands looking to combine profits and purpose.

Contextual factors modulate risk preferences in adult humans

Humans have generally been considered risk averse for gains. Yet, growing evidence shows that risk preferences may change across reward currencies and depend on the type of tasks used to measure them. Here, we examined how context affects human risk preferences to shed light on the psychological mechanisms underlying human decision-making under risk. Participants were presented with a descriptive risky choice task involving repeated choices between real options and they were provided with trial-by-trial feedback. We manipulated the type of reward and, for the first time, the format of the choice stimuli. Options were either 2D computer-based images or concrete 3D objects, and participants received food or money as reward. First, we found that participants were more risk-seeking for food compared to money, suggesting that people treat money differently from consumable rewards. Second, we found that people were more risk-seeking when they made choices between concrete 3D objects than between 2D computer-based images. Our results strengthened the evidence that human choice patterns may change depending on the context and, for the first time, showed that the format of the choice stimuli does affect risk preferences, an important consideration for future research.

Stay True to Your Roots? Category Distance, Hierarchy, and the Performance of New Entrants in the Music Industry

New entrants in established markets face competing recommendations over whether it is better to establish their legitimacy by conforming to type or to differentiate themselves from incumbents by proposing novel contributions. This dilemma is particularly acute in cultural markets in which demand for novelty and attention to legitimacy are both high. We draw upon research in organizational theory and entrepreneurship to hypothesize the effects of pursuing narrow or broad appeals on the performance of new entrants in the music industry. We propose that the sales of novel products vary with the distance perceived between the classes being combined and that this happens, in part, because combinations that appear to span great distances encourage consumers to adopt superordinate rather than subordinate classes (e.g., to classify and evaluate something as a “song” rather than a “country song”). Using a sample of 144 artists introduced to the public via the U.S. television program The Voice, we find evidence of a U-shaped relationship between category distance and consumer response. Specifically, consumers reward new entrants who pursue either familiarity (i.e., nonspanning) or distinctive combinations (i.e., combine distant genres) but reject efforts that try to balance both goals. An experimental test validates that manipulating the perceived distance an artist spans influences individual evaluations of product quality and the hierarchy of categorization. Together these results provide initial evidence that distant combinations are more likely to be classified using a superordinate category, mitigating the potential confusion and legitimacy-based penalties that affect middle-distance combinations.

Exercise as a reward: Self-paced exercise perception and delay discounting in comparison with food and money

Exercise is an important health behavior. Expressed reasons for participation are often delayed outcomes i.e. health threats and benefits, but also enjoyment. However, we do not know how people evaluate exercise as a reward. The value of rewards diminish the longer we have to wait for them and the discounting effect can undermine decision-making. Here, we investigated delay-discounting of exercise perception and its valuation with time delays; we conducted self-paced exercise sessions on treadmill and compared the discounting rates of exercise (kex) with those of established rewards of food (kfo) and money (km). Outcomes show, that young, moderately active participants (n = 70) preferred walking/running intensity with low to moderate cardiovascular strain and light perceived exertion. Delay discounting rates (k) indicated that exercise was discounted like other consumable rewards at the same rate as food and more rapidly than monetary rewards. Significant associations were detected of kex with preferred speed and with extrinsic exercise motivation. Exercise training (n = 16) reduced kex specifically, not affecting kfo. Our studies show, that participants perceived and discounted self-paced walking/running like a consumable reward. Exercise discounting was quicker in individuals who preferred lower speeds being less physically active and exercise training reduced the decay rate of exercise specifically.

Literacy matters in marketing

PurposeLiteracy represents one’s ability to process and produce materials related to a domain. One type of this higher-order, global individual difference variable is consumer financial literacy. It stems from one’s financial information processing capacity, prior financial knowledge, and proficiency in optimizing financial decisions and managing financial resources. The paper aims to discuss these issues.Design/methodology/approachThe research matching perspective theoretically explains findings related to literacy, including those in this special issue. Optimal processing arises as available and required processing resources correspond. Thus, cognitive comprehension and behavioral application/decision-making outcomes following financial marketing communication exposure are optimized when consumer financial literacy matches the level needed for successful processing. Insufficient or excess available resources harm outcomes.FindingsThe resource-matching perspective clarifies consumers’ increasing financial difficulties. Consumers limit personal finance efforts because required resources overwhelm limited financial literacy. However, education or experience can expand consumer financial literacy. Alternatively, financial service marketers may accommodate low consumer financial literacy by simplifying financial information presentation. Consumers reward firms that show sensitivity to their domain-specific literacy limitations with stronger loyalty.Research limitations/implicationsConstruct definition is vital to advance research. Yet, financial literacy has no generally accepted definition. This paper’s definitions should aid understanding of the psychological underpinnings of financial literacy’s components.Originality/valueMuch has been written about consumers’ inability to manage personal finances. This paper provides a unified, theoretical explanation for consumers increasing financial literacy difficulties and suggests ways that consumers, financial service providers, and public policy makers can overcome these difficulties.

Hunger enhances consistent economic choices in non-human primates

Hunger and thirst are fundamental biological processes that drive consumption behavior in humans and non-human animals. While the existing literature in neuroscience suggests that these satiety states change how consumable rewards are represented in the brain, it remains unclear as to how they change animal choice behavior and the underlying economic preferences. Here, I used combined techniques from experimental economics, psychology, and neuroscience to measure food preferences of marmoset monkeys (Callithrix jacchus), a recently developed primate model for neuroscience. Hunger states of animals were manipulated by scheduling feeding intervals, resulting in three different conditions: sated, non-sated, and hungry. During these hunger states, animals performed pairwise choices of food items, which included all possible pairwise combinations of five different food items except for same-food pairs. Results showed that hunger enhanced economic rationality, evident as a decrease of transitivity violations (item A was preferred to item B, and B to C, but C was preferred to A). Further analysis demonstrated that hungry monkeys chose more-preferred items over less-preferred items in a more deterministic manner, while the individual food preferences appeared to remain stable across hunger states. These results suggest that hunger enhances consistent choice behavior and shifts animals towards efficient outcome maximization.

Investigating the Impact of Cognitive Load and Motivation on Response Control in Relation to Delay Discounting in Children with ADHD.

Attention-deficit/hyperactivity disorder (ADHD) is characterized by deficits in impulse control across a range of behaviors, from simple actions to those involving complex decision-making (e.g., preference for smaller-sooner versus larger later rewards). This study investigated whether changes in motor response control with increased cognitive load and motivational contingencies are associated with decision-making in the form of delay discounting among 8-12year old children with and without ADHD. Children with ADHD (n=26; 8 girls) and typically developing controls (n=40; 11 girls) completed a standard go/no-go (GNG) task, a GNG task with motivational contingencies, a GNG task with increased cognitive load, and two measures of delay discounting: a real-time task in which the delays and immediately consumable rewards are experienced in real-time, and a classic task involving choices about money at longer delays. Children with ADHD, particularly girls, exhibited greater delay discounting than controls during the real-time discounting task, whereas diagnostic groups did not significantly differ on the classic discounting task. The effect of cognitive load on response control was uniquely associated with greater discounting on the real-time task for children with ADHD, but not for control children. The effect of motivational contingencies on response control was not significantly associated with delay discounting for either diagnostic group. The findings from this study help to inform our understanding of the factors that influence deficient self-control in ADHD, suggesting that impairments in cognitive control may contribute to greater delay discounting in ADHD.

Hoarders Only Discount Consumables and Are More Patient for Money.

Individuals with hoarding disorder (HD) excessively acquire and retain goods while also exhibiting characteristics of impulsivity and addiction. However, HD individuals do not always perform impulsively in experiments, they do not appear interested in money, and they exhibit many features of risk-aversion and future-planning. To examine impulsivity in HD, we compared validated community participants high and low in hoarding tendencies on questionnaire measures of hoarding and impulsivity as well as a standard experimental measure of impulsivity (intertemporal discounting) that was modified to compare decisions about money, pens, and snacks. Common discounting effects were replicated. Compared to the low hoarding group, the high hoarding group was more impatient for consumables (pens and snacks) but they were more patient for money. This increased patience for money in high hoarding individuals is in contrast to all other studies on discounting in disordered populations, but consistent with the phenomenology of HD. HD does not appear to be driven by a fundamental inability to wait, but rather a specific, potent desire for consumable rewards.

Despite unethical retail store practices, consumers at the bottom of the pyramid continue to be loyal

Research in the area of retail store loyalty agrees that consumers reward retailers when they are satisfied with its products, services, and its image. Moreover, one would agree that if the retailer engages in unethical practices, the customer would quickly defect and even engage in word of mouth to influence others to defect. But this might not be the case universally. One consumer group that continues to be loyal to a retailer despite widespread unethical practices is the poor. A growing stream of research under the label of bottom of pyramid (BoP) and subsistence consumers has increasingly pointed out the market attractiveness of this segment to multinational companies. These poor consumers are individuals who earn approximately $2 per day. In this paper, we explain the nature of widespread unethical retail practices prevalent amongst the neighborhood retail stores (or kirana as they are referred to in India) that serve the BoP consumer, types of patronage behaviors, and the reasons ‘why’ these consumers continue to support the kirana store. The data for this paper comes from a qualitative study conducted with 58 urban poor consumers in India. This study carries significant implications for both domestic and multinational companies that market fast-moving consumer goods in the BoP market.

Corporate social responsibility authenticity: Investigating its antecedents and outcomes

Authenticity is examined in various marketing literature, but an understanding of its role in the context of corporate social responsibility (CSR) is lacking. Although it is known that consumers reward companies that engage in CSR, there is still a notable level of skepticism that hinders the success of CSR campaigns. This paper describes two studies. The first employs content analysis to understand the factors that influence the perceived authenticity of CSR initiatives. The second empirical study develops and validates a CSR authenticity scale and offers evidence that CSR authenticity is influenced by fit, impact, and reparation. Further, the findings indicate that CSR authenticity has a mediating influence on important consumer outcomes. The results indicate that it is not enough for a firm to simply engage in CSR. A firm's CSR strategy must also take into account the extent to which consumers perceive the CSR initiative to be authentic.

A 5-trial adjusting delay discounting task: Accurate discount rates in less than one minute.

Individuals who discount delayed rewards at a high rate are more likely to engage in substance abuse, overeating, or problem gambling. Such findings suggest the value of methods to obtain an accurate and fast measurement of discount rate that can be easily deployed in variety of settings. In the present study, we developed and evaluated the 5-trial adjusting delay task, a novel method of obtaining a discount rate in less than 1 min. We hypothesized that discount rates from the 5-trial adjusting delay task would be similar and would correlate with discount rates from a lengthier task we have used previously, and that 4 known effects relating to delay discounting would be replicable with this novel task. To test these hypotheses, the 5-trial adjusting delay task was administered to 111 college students 6 times to obtain discount rates for 6 different commodities, along with a lengthier adjusting amount discounting task. We found that discount rates were similar and correlated between the 5-trial adjusting delay task and the adjusting amount task. Each of the 4 known effects relating to delay discounting was replicated with the 5-trial adjusting delay task to varying degrees. First, discount rates were inversely correlated with amount. Second, discount rates between past and future outcomes were correlated. Third, discount rates were greater for consumable rewards than with money, although we did not control for amount in this comparison. Fourth, discount rates were lower when $0 amounts opposing the chosen time point were explicitly described. Results indicate that the 5-trial adjusting delay task is a viable, rapid method to assess discount rate.

Smokers Discount Their Drug of Abuse in the Same Way as Other Consumable Rewards

Recent research shows that drug abusers discount delayed monetary rewards more than nonabusers do, and they discount delayed substances of abuse (e.g., drugs) more than delayed money. Furthermore, non-drug-abusers discount food and substances of abuse (e.g., alcohol), more than money. Here, we compare the delay and probability discounting of money with that of a directly consumable reward (chocolate) and with that of a substance of abuse (cigarettes), in a drug-using population (smokers). In line with previous research, we found in two experiments that delay discounting differentiated between smokers and nonsmokers, and between money and a nonabused directly consumable reward (chocolate). In addition, our results show that there appears to be no difference in the extent to which smokers discount their abused substance compared to another directly consumable reward. These findings support the contention that drugs and food are part of the same category of primary reinforcers, whereas money is discounted differently, as a conditioned reinforcer.

Domain-general and domain-specific aspects of temporal discounting in children with ADHD and autism spectrum disorders (ASD): A proof of concept study

It has been shown that delayed consumable rewards are discounted to a higher degree than money, which has been referred to as the "domain effect". Until now the effects of reward type on temporal discounting (TD) have mainly been studied in adults. Although there is evidence that children with attention-deficit/hyperactivity disorder (ADHD) tend to show steeper TD of money than typically developing peers or children with autism spectrum disorders (ASD), it remains untested whether the domain effect is also seen in children with ADHD and ASD. To explore this we compared TD of children (8-16 year) with ADHD, ASD and typically developing controls with five different reward types. Seventy-two participants with ADHD, 69 with ASD and 130 controls performed two hypothetical TD-tasks: a monetary TD-task and a TD-task with one of four alternative rewards (material rewards, rewarding activities, food, social rewards). TD was seen for all reward types, but the rate of discounting was steeper for food, praise and rewarding activities compared to money, and for food and praise compared to material rewards. For the ADHD and control groups, but not the ASD group, money and material rewards were equally highly discounted. High correlations between TD of money and of activities, food and material rewards were found. In conclusion, a domain effect was observed in typically developing children, as well as in children with ADHD or ASD, although the pattern was somewhat different for ASD children. Despite this domain effect, there is also evidence for a domain-general aspect in TD.

State Dependent Valuation: The Effect of Deprivation on Risk Preferences

The internal state of an organism affects its choices. Previous studies in various non-human animals have demonstrated a complex, and in some cases non-monotonic, interaction between internal state and risk preferences. Our aim was to examine the systematic effects of deprivation on human decision-making across various reward types. Using both a non-parametric approach and a classical economic analysis, we asked whether the risk attitudes of human subjects towards money, food and water rewards would change as a function of their internal metabolic state. Our findings replicate some previous work suggesting that, on average, humans become more risk tolerant in their monetary decisions, as they get hungry. However, our specific approach allowed us to make two novel observations about the complex interaction between internal state and risk preferences. First, we found that the change in risk attitude induced by food deprivation is a general phenomenon, affecting attitudes towards both monetary and consumable rewards. But much more importantly, our data indicate that rather than each subject becoming more risk tolerant as previously hypothesized based on averaging across subjects, we found that as a population of human subjects becomes food deprived the heterogeneity of their risk attitudes collapses towards a fixed point. Thus subjects who show high-risk aversion while satiated shift towards moderate risk aversion when deprived but subjects who are risk tolerant become more risk averse. These findings demonstrate a more complicated interaction between internal state and risk preferences and raise some interesting implications for both day-to-day decisions and financial market structures.

HOW MANY IMPULSIVITIES? A DISCOUNTING PERSPECTIVE

People discount the value of delayed and uncertain outcomes, and how steeply individuals discount is thought to reflect how impulsive they are. From this perspective, steep discounting of delayed outcomes (which fails to maximize long-term welfare) and shallow discounting of probabilistic outcomes (which fails to adequately take risk into account) reflect the same trait of impulsivity. Despite the fact that a hyperboloid function describes the discounting of both delayed and probabilistic outcomes, there is considerable evidence that the two kinds of discounting involve different processes as well as separate impulsivity traits. Several manipulations differentially affect delay and probability discounting, and correlational studies show that how steeply one discounts delayed rewards is relatively independent of how steeply one discounts probabilistic rewards. Moreover, people's discounting of delayed money and health outcomes are uncorrelated as are discounting of real, consumable rewards and hypothetical money. These results suggest that even within delay discounting, there may be multiple 'impulsivities,' each of which may be important for understanding a different aspect of decision making. Taken together, the pattern of findings reviewed here argues for a more nuanced view of impulsivity than that which is usually assumed in discounting research.

‘Meaningful marketing’: A process investigation of how consumers reward noninterruptive, nonpersuasive marketing communication

In this research, we investigate brand benevolence, brand trust, and indebtedness toward the brand arising out of noninterruptive, nonpersuasive marketing communication that provides utility to the consumer independent of consumption of the brand's product or service [defined as meaningful marketing (MM)]. Through three experiments, two using a real website of a popular brand and one using a fake recruitment site, we show that MM increases purchase intentions through the mediating influence of perceived benevolence. The influence of perceived benevolence on purchase intentions is, in turn, mediated by indebtedness and brand trust. Further, consumers reward MM even if it directly promotes the brand. Suggestions for future research and limitations are discussed.

Discounting of Various Types of Rewards by Women with and Without Binge Eating Disorder: Evidence for General Rather Than Specific Differences

The present study compared the extent to which obese women with binge eating disorder (BED), obese women without BED, and controls discounted delayed and probabilistic money and directly consumable rewards: food, massage time, and preferred sedentary activity. Of special interest was whether the BED group differed from the other groups in terms of their discounting of all three types of directly consumable rewards or only in their discounting of food. Overall, the BED group tended to discount both delayed and probabilistic rewards of all types more steeply than the obese and control groups. Thus, rather than finding differences specific to particular types of rewards, we find that women with BED are generally more impatient when choices involve delayed rewards and more risk averse when they involve probabilistic rewards. These results suggest a temperamental difference associated with BED that cannot be accounted for by the concomitant obesity.

Domain independence and stability in young and older adults’ discounting of delayed rewards

Individual discounting rates for different types of delayed reward are typically assumed to reflect a single, underlying trait of impulsivity. Recently, we showed that discounting rates are orders of magnitude steeper for directly consumable liquid rewards than for monetary rewards (Jimura et al., 2009), raising the question of whether discounting rates for different types of reward covary at the individual level. Accordingly, the present study examined the relation between discounting of hypothetical money and real liquid rewards in young adults (Experiment 1) and older adults (Experiment 2). At the group level, young adults discounted monetary rewards more steeply than the older adults, but there was no significant age difference with respect to liquid rewards. At the individual level, the rates at which young and older participants discounted each reward type were stable over a two- to fifteen-week interval (rs>70), but there was no significant correlation between the rates at which they discounted the two reward types. These results suggest that although similar decision-making processes may underlie the discounting of different types of rewards, the rates at which individuals discount money and directly consumable rewards may reflect separate, stable traits, rather than a single trait of impulsivity.