Spillover effect: Why we end up spending more when we think we're saving

November 07, 2006

Ever go to a store intending to buy one item, only to leave with a cartful? Or walked out of a store after feeling you had been overcharged for something you needed? A groundbreaking new paper in the December issue of the Journal of Consumer Research is the first to comprehensively outline "spillover effect" - that is, the tendency for consumers to spend more on a shopping trip when something they were planning to buy is deeply discounted. Similarly, an unanticipated price increase, or a decrease in quality, on a planned purchase causes overall spending to go down.

"Results from two laboratory studies show that spillover effects can occur in response to both positive and negative changes in either the price or quality of a product," write Narayan Janakiraman (University of Arizona), Robert J. Meyer (University of Pennsylvania), and Andrea C. Morales (Arizona State University). "Positive changes increase total spending on other items and negative changes reduce it."

Positive surprises, like a sale on something you were planning to buy anyway, inflated overall purchasing. But both unexpected price increases and decreases in quality caused people to buy fewer discretionary items - and to pass up other goods offered at attractive, discounted prices.

This challenges prior research on the effect that suggests that we mentally budget and react to feelings of diminished or increased wealth by shopping accordingly. Instead, based on their findings, the researchers argue that a more consistent root of "spillover effect" is attribution theory and our desire to reward or punish the retailer for shopping surprises.

Unexpected changes in price trigger feelings of anger or gratitude. In this sense, the researchers point out, consumers are like restaurant patrons who may express gratitude for a complimentary bottle of wine by ordering more, or express anger over a long wait by ordering less.

"Are the feelings rational? In some cases they might well be - such as if consumers have real reason to believe that a decision to withhold purchases might cause the retailer to offer better terms in the future," explain the authors. "But in this research no such expectations existed, [and] yet the instincts to reward or punish prevailed."
-end-
Founded in 1974, the Journal of Consumer Research publishes scholarly research that describes and explains consumer behavior. The primary thrust of JCR is academic, rather than managerial, with topics ranging from micro-level processes (e.g., brand choice) to more macro-level issues (e.g., the development of materialistic values). Empirical, theoretical, and methodological articles spanning fields such as psychology, marketing, sociology, economics, and anthropology are featured in this interdisciplinary quarterly.

Narayan Janakiraman, Robert J. Meyer, and Andrea C. Morales, "Spillover Effects: How Consumers Respond to Unexpected Changes in Price and Quality." Journal of Consumer Research: December 2006.

University of Chicago Press Journals

Related Consumers Articles from Brightsurf:

When consumers trust AI recommendations--or resist them
The key factor in deciding how to incorporate AI recommenders is whether consumers are focused on the functional and practical aspects of a product (its utilitarian value) or on the experiential and sensory aspects of a product (its hedonic value).

Do consumers enjoy events more when commenting on them?
Generating content increases people's enjoyment of positive experiences.

Why consumers think pretty food is healthier
People tend to think that pretty-looking food is healthier (e.g., more nutrients, less fat) and more natural (e.g., purer, less processed) than ugly-looking versions of the same food.

How consumers responded to COVID-19
The coronavirus pandemic has been a catalyst for laying out the different threats that consumers face, and that consumers must prepare themselves for a constantly shifting landscape moving forward.

Is less more? How consumers view sustainability claims
Communicating a product's reduced negative attribute might have unintended consequences if consumers approach it with the wrong mindset.

In the sharing economy, consumers see themselves as helpers
Whether you use a taxi or a rideshare app like Uber, you're still going to get a driver who will take you to your destination.

Helping consumers in a crisis
A new study shows that the central bank tool known as quantitative easing helped consumers substantially during the last big economic downturn -- a finding with clear relevance for today's pandemic-hit economy.

'Locally grown' broccoli looks, tastes better to consumers
In tests, consumers in upstate New York were willing to pay more for broccoli grown in New York when they knew where it came from, Cornell University researchers found.

Should patients be considered consumers?
No, and doing so can undermine efforts to promote patient-centered health care, write three Hastings Center scholars in the March issue of Health Affairs.

Consumers choose smartphones mostly because of their appearance
The more attractive the image and design of the telephone, the stronger the emotional relationship that consumers are going to have with the product, which is a clear influence on their purchasing decision.

Read More: Consumers News and Consumers Current Events
Brightsurf.com is a participant in the Amazon Services LLC Associates Program, an affiliate advertising program designed to provide a means for sites to earn advertising fees by advertising and linking to Amazon.com.