Judgments About Judgments: The Dissociation of Consideration Price and Transaction Commitment Judgments

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Abstract

There are many contexts in which people make judgments about prior judgments. For example, Internet shopping bots (e.g., NexTag.com) allow consumers to search for products and, if the price is too high, list a price at which they would consider making the purchase (i.e., base judgment). If the price drops to this level, the vendor generates an e-mail inviting the consumer to execute the transaction at the reduced price (i.e., contingent judgment). The authors show that the consideration price depends on the content of retrieved information, whereas the willingness to execute the transaction at the consideration price depends on the ease-of-retrieving the information. The authors use different offer prices to encourage the consumer to retrieve information consistent with different product quality levels. The authors also select offer prices so that information retrieval is more difficult at moderate offer prices than at high or low offer prices. Accordingly, the authors show that the consideration price increases as the offer price increases, but the willingness to execute the transaction at the consideration price is greater when there are high and low, as opposed to moderate, offer prices.

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