Spillover effect: Why we end up spending more when we think we're saving
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."
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.
Last reviewed: By John M. Grohol, Psy.D. on 21 Feb 2009
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