The neural bases of price estimation: Effects of size and precision of the estimate

The joint effect of framing and defaults on choice behavior

The framing effect leads people to prefer a sure alternative over a risky one (risk aversion) when alternatives are described as potential gains compared to a context-dependent reference point. The reverse (risk propensity) happens when the same alternatives are described as potential losses. The default effect is the tendency to prefer a preselected alternative over other non-preselected given options, without facilitating nor incentivizing the choice. These two effects have mainly been studied separately. Here we provided novel empirical evidence of additive effects due to the application of both framing and default within the same decision problem in a large sample size (N = 960). In the baseline condition, where no default was provided, we measured the proportion of risky choices in life-or-death and financial decisions both presented in terms of potential gains or losses following the structure of the Asian disease problem. In the sure default condition, the same layout was proposed with a flag on the sure option, whereas in the risky default condition, the flag was on the risky option. In both default conditions, we asked participants whether they wanted to change the preselected option. Overall, the comparison between these conditions revealed three distinct main effects: (i) a classic framing effect, (ii) a larger risk propensity in the life-or-death scenario than in the financial one, and (iii) a larger default effect when the flag was on the risky, rather than on the sure, option. Therefore, we conclude that default options can enhance risk propensity. Finally, individual beliefs about the source of the default significantly moderated the strength of the effect. Underlying mechanisms and practical implications are discussed considering prominent theories in this field.

Is the Discount Really Favorable? The Effect of Numeracy on Price Magnitude Judgment: Evidence From Electroencephalography

Attractive price promotion will induce an unreasonable willingness to purchase, especially through shopping. However, it is not clear how numeracy, one of the essential abilities for understanding and applying numbers, influences the process of purchase judgment. In total, 61 participants were recruited to perform a price promotion task using electroencephalography. The results showed that consumers with low numeracy performed worse than their peers with high numeracy at the behavioral level, and they also had lower P3b amplitude and less alpha desynchronization, regardless of price promotion frameworks. These findings provided evidence on the processing of price information and provided further insights into how numeracy impacts price magnitude judgment.

Affective perception of Euro banknotes: cognitive factors and interindividual differences

Money can be a tool to achieve a wide range of goals in everyday life. Different studies have reported that both the mere exposure to money and its use as a reward can determine cognitive and social effects. Nevertheless, little is known about the basic affective perception of Euro banknotes. Thus, in the present study we aim to assess differences in valence, arousal and familiarity evaluations of banknote pictures (from 5 to 500€) by taking into account gender, socioeconomic status and Love of Money (LoM) score, which measures the subjective attitude toward money, in a sample of participants. We found that valence and arousal increase with the nominal value of the banknotes, and that the relationship between these affective scores and the nominal value appears to be logarithmic (Weber's law) rather than linear. High value banknotes were evaluated as pleasant, highly arousing, and less familiar. Low value banknotes instead were evaluated as more familiar, less arousing and neutrally valenced. Finally, we found that valence and arousal evaluations are mainly influenced by the LoM score of our participants. Instead, gender and economic condition influenced only arousal scores. These findings suggest the importance of deepening the study of these variables to shed light on money-related biases and abnormal economic behaviors.