Universal Journal of Psychology Vol. 3(5), pp. 137 - 141
DOI: 10.13189/ujp.2015.030501
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Price Range Effect on Extremeness Aversion and Compromise Effect

Pei-Hsun Wu ^1,*, Mei-Ching Huang ¹, Yi-Shu Wang ^2
1 Department of International Business, National Taichung University of Science and Technology, Taiwan
² Department of Business Administration, Chien Hsin University of Science and Technology, Taiwan

ABSTRACT

Recent decision research has discovered the presence of the extremeness aversion and compromise effect in choice. The extremeness aversion and compromise effect extend the principle of loss aversion. Based on the inference that a loss will not be possibly prominent when the price range for alternatives in a choice set was narrower, the present research pointed out that the prices difference for alternatives in the choice set, via different psychological mechanisms, loss aversion versus cost-effectiveness, affects a consumer's choice. Two studies demonstrated that the level of extremeness aversion (Study 1) and compromise effect (Study 2) in the case of a wider price range will be higher than that in the case of a narrower price range. Theoretical and practical implications of the finding were discussed.

KEYWORDS
Price Range, Consumer Choice, Extremeness Aversion, Compromise Effect

Cite This Paper in IEEE or APA Citation Styles
(a). IEEE Format:
[1] Pei-Hsun Wu , Mei-Ching Huang , Yi-Shu Wang , "Price Range Effect on Extremeness Aversion and Compromise Effect," Universal Journal of Psychology, Vol. 3, No. 5, pp. 137 - 141, 2015. DOI: 10.13189/ujp.2015.030501.

(b). APA Format:
Pei-Hsun Wu , Mei-Ching Huang , Yi-Shu Wang (2015). Price Range Effect on Extremeness Aversion and Compromise Effect. Universal Journal of Psychology, 3(5), 137 - 141. DOI: 10.13189/ujp.2015.030501.