Losing more than gaining from overall stable prices: the differential perception of increasing versus decreasing prices made the Euro look like a price booster
Article first published online: 25 NOV 2007
Copyright © 2007 John Wiley & Sons, Ltd.
European Journal of Social Psychology
Volume 38, Issue 5, pages 786–799, August 2008
How to Cite
Greitemeyer, T. and Greifeneder, R. (2008), Losing more than gaining from overall stable prices: the differential perception of increasing versus decreasing prices made the Euro look like a price booster. Eur. J. Soc. Psychol., 38: 786–799. doi: 10.1002/ejsp.476
- Issue published online: 18 JUL 2008
- Article first published online: 25 NOV 2007
- Manuscript Accepted: 4 OCT 2007
- Manuscript Received: 23 FEB 2007
The present research examined whether price trend misperceptions can be explained by the differential perception of increasing versus decreasing prices. We expected price increases (losses to consumers) to be perceived as being more intense than price decreases (gains to consumers) of the same magnitude. This tendency, in turn, should be positively associated with how people perceive the overall price trend. To test this reasoning, participants in the first two studies were asked to compare German Mark (DM) and Euro prices. First, participants received a menu containing 21 dishes with DM prices, and their price trend expectations were assessed. Then, participants indicated for each dish to what extent the price had changed. Finally, participants' overall price trend judgments were assessed. In both studies, results indicate that price trend judgments were biased toward rising prices. In addition, price increases were perceived as rising more than price decreases of the same magnitude were perceived as falling. This tendency was positively associated with overall price trend judgments, even after controlling for expectations. Study 3 was to replicate these findings in a different domain to demonstrate the general nature and impact of the hypothesized effect. Copyright © 2007 John Wiley & Sons, Ltd.