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Tuesday, July 23, 2024 | Back issues
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Perception of Value Comes From Experience, Study Finds

Encountering cheap or ineffective products can influence how much a consumer is willing to pay for other items, a new study finds.

(CN) – Encountering cheap or ineffective products can influence how much a consumer is willing to pay for other items, a new study finds.

The results, published Monday in the journal Proceedings of the National Academy of Science, show that when consumers are exposed to low-value items, they are willing to pay more for products they come across later, and vice versa.

“How people value an item is not a simple function of that item alone,” said co-author Kenway Louie, an assistant professor at New York University’s Center for Neural Science. “The valuation process is inherently relative, with people valuing the same item more or less depending on the environment they recently inhabited.

“Our study shows that rewards cannot be evaluated in isolation, but instead must be viewed through the lens of the recent past.”

Scientists have previously established the human brain processes information by making comparisons, as opposed to absolute judgments. This dynamic is a fundamental aspect of sensory processing, in which our perception of sensory stimuli depends on the context in which they appear. For example, music played from a phone’s internal speakers will sound less loud to someone who has just returned from a concert than someone who has been reading in a quiet room.

What is less clear, however, is how sensory processing impacts how we value things.

To unpack this dynamic, the team analyzed how different environments affect how people value food items.

The researchers showed participants 30 different food items on a computer screen and asked the subjects how much they would pay for the various options. The team examined the responses and ranked the items from lowest to highest, based on the participants’ responses.

The subjects then underwent a series of trials in which they were shown only the 10 lowest-valued items – a “low-value” condition called “the adapt block.”

The team then repeated the first part of the study, asking the participants how much they would pay for each of the 30 items in order to determine if viewing the lowest-valued items would motivate the subjects to pay more than they originally stated.

After viewing the lower-priced items, the participants said they would pay more for the 30 items than they would have initially, as the researchers predicted.

The team then repeated the adapt block – this time showing the subjects the 10 highest-value items. After seeing the higher-priced items, the participants said they would pay less for all 30 items than previously stated.

“Collectively, these findings provide the first evidence that adaptation extends to the economic value we place on products,” Louie said. “Moreover, they suggest that adaptation is a universal feature of cognitive information processing.”

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Categories / Consumers, Science

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