Could Black Friday Set off a Chain of Goodwill? Study

First Posted: Nov 26, 2013 09:07 PM EST
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With Black Friday just a few days away, shoppers across the nation are preparing for sales. However, researchers at UC Berkely looked to determine what happens when there's no set price tag. In a study that focuses on consumer guilt during the infamous holiday shopping day, they found that those engaged in a chain of goodwill were more likely to "pay-it-forward" when it came to their own price. 

"It's assumed that consumers are selfish and always looking for the best deal, but when we gave people the option to pay for someone else, they always paid more than what they paid for themselves," said the study's lead author, Minah Jung, a doctoral student at the Haas School of Business and a Gratitude Dissertation Fellow at UC Berkeley's Greater Good Science Center, via a press release.

The study resulsts show both the psychological and social forces that contribute to consumer decisions that go beyond getting the best deal. For example, the study found that people often typically overestimate the financial generosity of others, until they realize what many have actualy paid. 

"People don't want to look cheap. They want to be fair, but they also want to fit in with the social norms," said Jung, whose findings have been presented at the annual meeting of the Society for Personality and Social Psychology, and the Association for Consumer Research, among other conferences, and are being submitted for publication.

Pay-it-forward vs. Pay-what-you-want

The study defines pay-it-foward as the pricing sceme in which patrons are told that a previous customer has paid for them. While "pay-what-you-want" involves an economically similar approach in which consumers have the option to pay any price they want. 

For their research, study authors compared how more than 2,400 individuals responded to these two elective pricing models seen at various evnues. In eight separate experiments, they compared how these participants responded to the two venues as San Francisco's Cartoon Art Museum, the farmers market at Oakland's Jack London Square and in laboratory settings.
Findings showed that at the museum and at the farmers market, consumers consistenly paid more for another customer than for themselves when purchasing certain items--i.e., showing that 'pay-it-foward' can set off a chain of goodwill. 

The same dynamic also occured in other experiments, according to study findings.

"The results suggest that businesses that rely entirely on consumers' social preferences can survive and even thrive," Jung said. "It's pretty amazing."  

What do you think?

More information regarding the study findings can be found here

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