Affective Price Evaluations: How Pain, Pleasure, and Metacognitive Feeling Influence Price Evaluations

The pricing literature has largely been tethered to the tenet in neoclassical economics that the price of a good in a market is determined by the forces of supply and demand, and demand, in turn, is influenced by consumers’ stable preferences and income levels. In this macro-level model, the consumer is often portrayed as a utility maximizer, making purchase decisions by trading the subjective value of money for the perceived utility of the good. Because of this tethering to neoclassical economics, early pricing researchers largely focused on estimating demand curves and how the demand curves changed with demographic variables, and product-related and category-related factors. They were not very interested in studying the role of affective processes in consumers’ price evaluations, mostly because of a lack of appreciation of the role of affect in judgment and decision-making. The literature on theoretical concepts and frameworks required to coherently characterize affective processes is therefore underdeveloped. Affective responses were not considered an important determinant of consequential economic decisions…