Self-Signaling and the Costs and Benefits of Temptation in Consumer Choice

Ravi Dhar and Klaus Wertenbroch
Journal of Marketing Research (JMR)
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The authors demonstrate that consumers derive utility not only from the benefits they obtain from the items they purchase but also from what they can infer about their ability to resist temptation from other items in the choice set that they did not choose. These self-signaling benefits influence consumer willingness to pay and their preferences for different types of choice sets. They have implications for pricing policies and assortment design across a variety of industries, including retailing and financial services.

The authors’ research is motivated by the vast amount of choices in the marketplace that are often a source of temptation for consumers. The current obesity epidemic and high levels of consumer debt in the run-up to the financial crisis demonstrate that such temptation is typically costly. These costs arise not only from giving in to the temptation to consume but also from mere exposure to temptation, creating psychological costs of resisting temptation. Fearful of the consequences of succumbing to temptation, consumers must expend willpower to resist it or limit their own access to tempting vice options (e.g., alcohol, cigarettes, food rich in calories or fat) by self-rationing their consumption. Thus, smokers often choose to buy cigarettes in single packs instead of cartons to limit their consumption. In addition to these costs of temptation, the study shows that temptation might also confer psychological benefits because consumers may make positive attributions about themselves when they successfully resist temptation.

The psychological costs and benefits of temptation arise from self-signaling effects of how consumers handle tempting choice options. Succumbing to temptation is a (costly) self-signal of weak willpower, whereas resisting temptation is a (beneficial) self-signal of strong willpower. In a series of five psychological experiments, the authors demonstrate that these self-signaling costs and benefits of temptation depend not only on the chosen item but also on the temptation from the other options in the choice set. For example, they show that consumers prefer to choose “virtue” options (e.g., fresh fruit) from menus that also contain more tempting “vice” options (e.g., chocolate) as long as they believe they can resist the temptation to purchase those vice options. Thus, consumers prefer assortments that offer not only their planned virtue purchases but also vice options that provide for positive self-signals as long as they are not purchased. Conversely, consumers who purchase vice products are better off choosing those from assortments that do not include more virtuous products, which provide for negative self-signals. The authors conclude the article with a discussion of theoretical implications for research on impulsive choice and self-control and on self-signaling and an outline of managerial implications for pricing and assortment strategies.

Biography
Ravi Dhar (PhD, University of California, Berkeley) is George Rogers Clark Professor of Management and Marketing and the director of the Yale Center for Customer Insights at the Yale School of Management at Yale University. Professor Dhar also has an affiliated appointment as Professor of Psychology in the Department of Psychology at Yale University. His research awards include the William F. O’Dell Award and an honorable mention for the John A. Howard/AMA Doctoral Dissertation Award. His other research has been a finalist for the Paul Green Award and a finalist for the O’Dell award. He has written more than 40 articles and serves on the editorial boards of leading marketing journals, such as Journal of Consumer Research, Journal of Marketing, Journal of Marketing Research (area editor), and Marketing Science (area editor), among others.

Klaus Wertenbroch (PhD, MBA, University of Chicago) is Professor of Marketing at INSEAD, the international business school, and Visiting Professor of Marketing at the Wharton School, University of Pennsylvania. He is an expert in consumer decision making, strategic brand management, and pricing and directs INSEAD’s executive International Marketing Programme. He has worked with leading global client companies in financial services, retailing, and consumer goods, among others. Dr. Wertenbroch has held faculty positions at Duke and Yale Universities and was Visiting Professor at the University of California, Berkeley. A contributor to financial education initiatives (e.g., Citigroup, OECD, U.S. Treasury Department), he is currently researching policy effects on consumer behavior. Dr. Wertenbroch won the 1995 AMA dissertation award and the 2005 O'Dell award, the prestigious AMA award for long-run contributions to marketing research. He is Associate Editor for the Journal of Consumer Psychology and is on the Editorial Boards of several other leading marketing journals.

Journal of Marketing Research, Volume 49, Number 1, February 2012
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Ravi Dhar and Klaus Wertenbroch
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