Buyers Versus Sellers: How They Differ in Their Responses to Framed Outcomes

Abstract

Consumers’ reactions to a difference in price can depend on how it is framed. If buyers interpret paying $60 rather than $65 as getting a $5 discount, then they are likely to consider paying $60 to be a gain and paying $65 to be a nongain. Alternatively, if they interpret having to pay $65 rather than $60 as incurring a $5 penalty, then they may consider paying $60 to be a nonloss and paying $65 to be a loss. Similarly, sellers can also experience gains, nongains, nonlosses, and losses. This article suggests that buyers are prevention focused and consequently place a greater emphasis on loss‐related frames, whereas sellers are promotion focused and place a greater emphasis on gain‐related frames. Therefore, for equivalent positive outcomes, buyers feel better about nonlosses, but sellers feel better about gains. For equivalent negative outcomes, buyers feel worse about losses, but sellers feel worse about nongains. These effects, however, disappear when there is little motivation to process information about the monetary transaction.

Motivational correlates of need for cognition

“…In contrast, approach and avoidance motives are more likely to be situationally dependent (Foxall & Yani-deSoriano, 2005;Pham & Avnet, 2004). For example, differences in the concern with positive or negative behavioral outcomes might be activated by describing the outcomes of a decision as either gains versus non-gains or non-losses versus losses (Lee & Aaker, 2004;Monga & Zhu, 2005). They can also be induced by (a) activating individuals' concepts of themselves as independent or interdependent (Lee, Aaker, & Gardner, 2000; see also Hamilton & Biehl, 2005), (b) stimulating thoughts about hopes and aspirations as opposed to duties and responsibilities (Liberman, Molden, Idson, & Higgins, 2001), or (c) varying individuals' awareness of themselves as members of a group (Aaker & Lee, 2001;Briley & Wyer, 2002).…”

Pay to walk away: Prevention buyers prefer to avoid negotiation

“…By contrast, sellers in this situation are likely to perceive the situation as one in which they can receive a maximum gain of €5 and a minimum gain of €0. The theory we advance here suggests that, due to buyers' tendency to apply loss vs. non loss frames (Monga & Zhu, 2005), there is a fit between prevention orientation and the buyer role (and not the seller role).…”

“…We however, developed the prediction and provided evidence for an alternative interaction effect, namely, that buyers' regulatory focus will influence their negotiation aversion more than sellers' regulatory focus. Focusing on a different type of exchange, in which goods are exchanged for money (rather than other goods), we reason that money serves as the focal point of the exchange interaction (Appelt et al, 2009;Monga & Zhu, 2005).…”

“…That is, the role of a buyer centers around a loss/nonloss frame whereas the sellers role centers around a gain/non-gain frame (see Appelt et al, 2009;Carmon & Ariely, 2000;De Dreu, Carnevale, Emans, & van de Vliert, 1994;Neale, Huber, & Northcraft, 1987). As demonstrated empirically by Monga & Zhu (2005), in such price-emphasizing negotiations, the focus is money, whether attaining it or maintaining it.…”

The role of regulatory fit on the attraction effect

“…For example, Aaker and Lee (2001) show that promotion-focused consumers evaluate a juice positioned on promotion benefits (e.g., energy and taste) more positively whereas prevention-focused consumers do the same to a juice positioned on prevention benefits (e.g., cardiovascular disease prevention). Monga and Zhu (2005) show that (prevention-focused) buyers place a greater emphasis on loss-related price frames (i.e., they feel better about non-losses but worse about losses), whereas (promotion-focused) sellers place a greater emphasis on gain-related frames (i.e., they feel better about gains but worse about non-gains).…”