A new study forthcoming in the December 2005 issue of the Journal of Consumer Research explores "range effect" and seeks to understand better what consumers do when faced with a range of price and quality options. Specifically, the authors found that offering a wide range of options causes consumers to gravitate towards extreme choices because it is easier for the consumer to discern difference.
"When two attributes have different levels of evaluability, extending the range of the background set would shift preferences towards the option that has a greater quantity of the high evaluability attribute," write Catherine W. M. Yeung (University of Singapore) and Dilip Soman (University of Toronto). However, "range effect" occurs at the expense of mid-priced products, particularly at stores where quality ranges from moderately good to moderately very good.
"We show that widening the range of encountered options increases the choice of the cheaper option relative to the more expensive option," write the autors.
Suzanne Wu | EurekAlert!
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