Naïve theories of price: A developmental model

Abstract

A model of the development of naïve theories of price is presented and tested. The criterion used to account for price variations within a product category is product features at age five, product features and quality at age ten, product quality and buyer utility at age thirteen, and a combination of supply considerations and buyer utility/demand in adulthood. Five‐year‐olds do not justify their use of product features as a price criterion; however, older respondents all justify their price criterion by referring to a source of value. At age ten, variation in the amount of manufacturing inputs is the source of value which justifies the use of product features as a price criterion; at age thirteen, variations in the quality of manufacturing inputs justify the use of product quality as a price criterion; and in adulthood, relative scarcity and buyer preferences justify the use of cost and demand as price criteria.

The Development of a Scarcity Bias

“…Specifically, a number of theoretical accounts attribute the scarcity bias to some understanding of how market dynamics affect object value (Amaldoss & Jain, ; Gierl et al, ; Lynn, ; Verhallen & Robben, ). Accordingly, one would have expected such a bias to emerge only at an age children have some such understanding—which is arguably by school‐age (Thompson & Siegler, ) or even early adolescence (Fox & Kehret‐Ward, ; John, ; Leiser & Beth‐Halachmi, ; Valkenburg & Cantor, ; Williams et al, ). Indeed, one experiment to date that assessed the development of a scarcity bias, documented its emergence at around age 10 (Echelbarger & Gelman, ), another at 7 (Diesendruck et al, ), and a third at 6 (but only with unknown items, either in a competitive context, or only among boys is noncompetitive ones; John et al, ).…”

“…According to these “derived” accounts, children should manifest a scarcity bias by the age they are capable of understanding such social and economic factors. By most estimates, this would be around 7‐years at the earliest, as this is the age at which an understanding of the relation between market dynamics and object value starts to appear (Thompson & Siegler, ), though such an understanding consolidates by early adolescence (Fox & Kehret‐Ward, ; John, ; Leiser & Beth‐Halachmi, ; Valkenburg & Cantor, ; Williams, Ashill, & Thirkell, ).…”

The preference for scarcity: A developmental and comparative perspective

“…We developed methods that isolated scarcity effects from those of salience, and also developed ways to test for scarcity preference in chimpanzees. We tested children aged 4 and 6 because in this age range they are not yet familiar with prices and the relationship between economic variables such as supply and demand (Fox & Kehret‐Ward, , ; John, ; Leiser, ).…”

La place du prix dans la socialisation de l’enfant-consommateur

“…Plus tard, l'enfant affine son raisonnement et des attributs fonctionnels, comme la qualité, complètent son évaluation des prix. A partir de 13 ans, il devient capable d'abstraction et peut juger les prix en les contextualisant (Fox et Kehret Ward, 1990), c'est-àdire en intégrant des variables d'environnement (e.g. l'image-prix du magasin ou les attentes du destinataire du produit) dans son évaluation.…”

“…proposition 8). Les caractéristiques du produit (Damay, 2008a ;Fox et Kehret-Ward, 1990 ;Melkman et al, 1981 ;Tversky, 1985).…”