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Opportunity Cost Neglect

Author

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  • Shane Frederick
  • Nathan Novemsky
  • Jing Wang
  • Ravi Dhar
  • Stephen Nowlis

Abstract

To properly consider the opportunity costs of a purchase, consumers must actively generate the alternatives that it would displace. The current research suggests that consumers often fail to do so. Even under conditions promoting cognitive effort, various cues to consider opportunity costs reduce purchase rates and increase the choice share of more affordable options. Sensitivity to such cues varies with chronic dispositional differences in spending attitudes. We discuss the implications of these results for the marketing strategies of economy and premium brands. (c) 2009 by JOURNAL OF CONSUMER RESEARCH, Inc..

Suggested Citation

  • Shane Frederick & Nathan Novemsky & Jing Wang & Ravi Dhar & Stephen Nowlis, 2009. "Opportunity Cost Neglect," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 36(4), pages 553-561, December.
    • Handle: RePEc:oup:jconrs:v:36:y:2009:i:4:p:553-561
    DOI: 10.1086/599764
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