The Feedback-Related Negativity and the P300 Brain Potential Are Sensitive to Price Expectation Violations in a Virtual Shopping Task

The Influence of Tourist Attraction Type on Product Price Perception and Neural Mechanism in Tourism Consumption: An ERP Study

Background

Tourism consumption is a topic with heated debates in tourism research, and pricing tourism products is a crucial task for tourism managers. Different types of tourist attractions offer different experiences to tourists, which affect their price perceptions and purchase decisions.

Methods

This study combined questionnaires and event-related potentials (ERPs) measures to explore the magnitude of psychological conflict and the degree of emotional arousal that consumers experience when faced with different prices of goods in different scenic types.

Results

The questionnaire results showed that attraction type influenced consumers' price perceptions and that consumers were willing to pay higher prices for products in attractions. The ERP results implied that in the early stage of cognition, attraction type did not affect consumers' perceptual processing, while price information attracted consumers' cognitive attention. In the late stage of cognition, attraction type, and price information jointly influenced consumers' decision-making, and consumers tended to accept high prices of products in entertainment attractions and cultural attractions, but consumers were more sensitive to the price of products in cultural attractions and less tolerant to price increases.

Conclusion

The study elucidated how price information influenced consumers' purchase decisions of tourism products at different stages of the dual-process theory, which can assist tourism managers in devising different pricing strategies and positioning strategies based on the attributes of attractions, to enhance product sales and revenues. This would further the vision of the World Tourism Organization (UNWTO) of "tourism fostering economic development".

Neural mechanisms of expert persuasion on willingness to pay for sugar

Introduction: Sugar consumption is associated with many negative health consequences. It is, therefore, important to understand what can effectively influence individuals to consume less sugar. We recently showed that a healthy eating call by a health expert can significantly decrease the willingness to pay (WTP) for sugar-containing food. Here, we investigate which aspects of neural responses to the same healthy eating call can predict the efficacy of expert persuasion.

Methods: Forty-five healthy participants performed two blocks of a bidding task, in which they had to bid on sugar-containing, sugar-free and non-edible products, while their electroencephalography (EEG) was recorded. In between the two blocks, they listened to a healthy eating call by a nutritionist emphasizing the risks of sugar consumption.

Results: We found that after listening to the healthy eating call, participants significantly decreased their WTP for sugar-containing products. Moreover, a higher intersubject correlation of EEG (a measure of engagement) during listening to the healthy eating call resulted in a larger decrease in WTP for sugar-containing food. Whether or not a participant’s valuation of a product was highly influenced by the healthy eating call could also be predicted by spatiotemporal patterns of EEG responses to the healthy eating call, using a machine learning classification model. Finally, the healthy eating call increased the amplitude of the P300 component of the visual event-related potential in response to sugar-containing food.

Disussion: Overall, our results shed light on the neural basis of expert persuasion and demonstrate that EEG is a powerful tool to design and assess health-related advertisements before they are released to the public.

Motivation in the metaverse: A dual-process approach to consumer choices in a virtual reality supermarket

Introduction

Consumer decision-making processes involve a complex interrelation between perception, emotion, and cognition. Despite a vast and diverse literature, little effort has been invested in investigating the neural mechanism behind such processes.

Methods

In the present work, our interest was to investigate whether asymmetrical activation of the frontal lobe of the brain could help to characterize consumer's choices. To obtain stronger experimental control, we devised an experiment in a virtual reality retail store, while simultaneously recording participant brain responses using electroencephalogram (EEG). During the virtual store test, participants completed two tasks; first, to choose items from a predefined shopping list, a phase we termed as "planned purchase". Second, subjects were instructed that they could also choose products that were not on the list, which we labeled as "unplanned purchase." We assumed that the planned purchases were associated with a stronger cognitive engagement, and the second task was more reliant on immediate emotional responses.

Results

By analyzing the EEG data based on frontal asymmetry measures, we find that frontal asymmetry in the gamma band reflected the distinction between planned and unplanned decisions, where unplanned purchases were accompanied by stronger asymmetry deflections (relative frontal left activity was higher). In addition, frontal asymmetry in the alpha, beta, and gamma ranges illustrate clear differences between choices and no-choices periods during the shopping tasks.

Discussion

These results are discussed in light of the distinction between planned and unplanned purchase in consumer situations, how this is reflected in the relative cognitive and emotional brain responses, and more generally how this can influence research in the emerging area of virtual and augmented shopping.

Bid outcome processing in Vickrey auctions: An ERP study

Online retailers often sell products using a socially competitive second-price sealed-bid auction known as a Vickrey auction (VA), an incentivized demand-revealing mechanism used to elicit players' subjective values. The VA presents a situation of risky decision-making, which typically implements value processing and a loss aversion mechanism. Neural outcome processing of VA bids are not known; this study explores this for the first time using EEG. Twenty-eight healthy participants bid on household items against an anonymous, computerized opponent. Bid outcome event-related potentials were predicted to differentiate between three conditions: outbid (no-win), large margin win (bargain), and small margin win (snatch). Individual loss aversion values were evaluated in a separate behavioral experiment offering gains or losses of variable amounts but equal chances against an assured gain. Processing outcomes of VA bids were associated with a feedback-related negativity (FRN) potential with a spatial maximum at the vertex (251-271 ms), where bargain win trials resulted in greater FRN amplitudes than snatch win trials. Additionally, a P300 potential was sensitive to win versus no-win outcomes and to retail price. Individual loss aversion level did not correlate with the strength of FRN or P300. Results show that outcome processing in a VA is associated with FRN that differentiates between relatively advantageous and less advantageous gains, and a P300 that distinguishes between the more and less expensive auction items. Our findings pave the way to an objective exploration of economic decision-making and purchasing behavior involving a widely popular auction.

A systematic review of the prediction of consumer preference using EEG measures and machine-learning in neuromarketing research

Introduction

The present paper discusses the findings of a systematic review of EEG measures in neuromarketing, identifying which EEG measures are the most robust predictor of customer preference in neuromarketing. The review investigated which TF effect (e.g., theta-band power), and ERP component (e.g., N400) was most consistently reflective of self-reported preference. Machine-learning prediction also investigated, along with the use of EEG when combined with physiological measures such as eye-tracking.

Methods

Search terms ‘neuromarketing’ and ‘consumer neuroscience’ identified papers that used EEG measures. Publications were excluded if they were primarily written in a language other than English or were not published as journal articles (e.g., book chapters). 174 papers were included in the present review.

Results

Frontal alpha asymmetry (FAA) was the most reliable TF signal of preference and was able to differentiate positive from negative consumer responses. Similarly, the late positive potential (LPP) was the most reliable ERP component, reflecting conscious emotional evaluation of products and advertising. However, there was limited consistency across papers, with each measure showing mixed results when related to preference and purchase behaviour.

Conclusions and implications

FAA and the LPP were the most consistent markers of emotional responses to marketing stimuli, consumer preference and purchase intention. Predictive accuracy of FAA and the LPP was greatly improved through the use of machine-learning prediction, especially when combined with eye-tracking or facial expression analyses.

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.

Event-related brain potentials reflect predictive coding of anticipated economic change

Research has demonstrated the importance of economic forecasts for financial decisions at the aggregate economic level. However, little is known about the psychological and neurophysiological mechanisms that economic forecasts activate at the level of individual decision-making. In the present study, we used event-related brain potentials (ERPs) to test the hypothesis that economic forecasts influence individuals’ internal model of the economy and their subsequent decision behavior. Using a simple economic decision-making game, the Balloon Analogue of Risk Task (BART) and predictive messages about possible economic changes in the game before each block, we test the idea that brain potentials time-locked to decision outcomes can vary as a function of exposure to economic forecasts. Behavioural results indicate that economic forecasts influenced the amount of risk that participants were willing to take. Analyses of brain potentials indicated parametric increases of the N1, P2, P3a, and P3b amplitudes as a function of the level of risk in subsequent inflation steps in the BART. Mismatches between economic forecasts and decision outcomes in the BART (i.e., reward prediction errors) were reflected in the amplitude of the P2, P3a, and P3b, suggesting increased attentional processing of unexpected outcomes. These electrophysiological results corroborate the idea that economic messages may indeed influence people’s beliefs about the economy and bias their subsequent financial decision-making. Our findings present a first important step in the development of a low-level neurophysiological model that may help to explain the self-fulfilling prophecy effect of economic news in the larger economy.

An Investigation of a Frontal Negative Slow Wave in a Virtual Hedonic Purchase Task

There is a connection between the frontal negative slow wave (FNSW) and the arousal inhibition in the hedonic purchase context. To calculate the FNSW (400–800 ms), event-related potentials (ERPs) method was applied to depict the neural substrates on prudent and impulsive consumers’ behaviors within various states of promotion. Promotion types include the pure price promotion and the mixed promotion (a mixture of a charitable donation and a discount). Behaviorally, consumers response more quickly in the pure price promotion condition and they express a preference for the mixed promotion. More importantly, a larger FNSW emerged in the impulsive consumers than the prudent, suggesting that the former might tend to control their eagerness to consume hedonic items. Compared with the price promotion as the worse option, the mixed promotion as the better option caused more perceptual conflict, leading to an increase in N2 amplitude. It suggests that consumers incline to reject the worse offers. These results also reveal that people primarily have to search negative promotion information by their insight and subsequently impulsive consumers inhibit the responses to the promotion information. The method of ERPs and FNSW should be helpful for marketing researchers and professionals on hedonic consumption and sales promotion.

How Do Reference Points Influence the Representation of the N200 for Consumer Preference?

Recent studies have suggested that event-related brain potential (ERP) can represent consumer preference, and there is consensus that the N200 is the best indicator of consumer preference. Measurement of reference-dependent consumer preference, in turn, requires a reference point, but it remains largely unknown how reference points modulate the preference-related N200. We designed an experiment to investigate how reference points affect the N200 based on classical paradigms. In the single-reference condition, one product was displayed in each trial; in the conjoined-reference condition, a pair of products was displayed simultaneously. Our results showed that in the single-reference condition, low-preference products elicited more negative N200 than high-preference products, replicating previous results, but the N200 could not distinguish between low‐ and high-preference products when viewing two options of similar subjective value in the conjoined-reference condition. These findings suggest that reference points modulate the representation of the N200 on consumer preference. When only viewing one product, participants make a value judgment based on their expectations. However, when viewing two products simultaneously, both their expectation and the alternative product can serve as reference points, and whether the N200 can represent consumer preference depends on which reference point is dominant. In future research, reference points must be controlled when the N200 is used to explore value-related decision-making.

Is EEG Suitable for Marketing Research? A Systematic Review

Background: In the past decade, marketing studies have greatly benefited from the adoption of neuroscience techniques to explore conscious and unconscious drivers of consumer behavior. Electroencephalography (EEG) is one of the most frequently applied neuroscientific techniques for marketing studies, thanks to its low cost and high temporal resolution. Objective: We present an overview of EEG applications in consumer neuroscience. The aim of this review is to facilitate future research and to highlight reliable approaches for deriving research and managerial implications. Method: We conducted a systematic review by querying five databases for the titles of articles published up to June 2020 with the terms [EEG] AND [neuromarketing] OR [consumer neuroscience]. Results: We screened 264 abstracts and analyzed 113 articles, classified based on research topics (e.g., product characteristics, pricing, advertising attention and memorization, rational, and emotional messages) and characteristics of the experimental design (tasks, stimuli, participants, additional techniques). Conclusions: This review highlights the main applications of EEG to consumer neuroscience research and suggests several ways EEG technique can complement traditional experimental paradigms. Further research areas, including consumer profiling and social consumer neuroscience, have not been sufficiently explored yet and would benefit from EEG techniques to address unanswered questions.

The semiotics of the message and the messenger: How nonverbal communication affects fairness perception

Nonverbal communication determines much of how we perceive explicit, verbal messages. Facial expressions and social touch, for example, influence affinity and conformity. To understand the interaction between nonverbal and verbal information, we studied how the psychophysiological time-course of semiotics—the decoding of the meaning of a message—is altered by interpersonal touch and facial expressions. A virtual-reality-based economic decision-making game, ultimatum, was used to investigate how participants perceived, and responded to, financial offers of variable levels of fairness. In line with previous studies, unfair offers evoked medial frontal negativity (MFN) within the N2 time window, which has been interpreted as reflecting an emotional reaction to violated social norms. Contrary to this emotional interpretation of the MFN, however, nonverbal signals did not modulate the MFN component, only affecting fairness perception during the P3 component. This suggests that the nonverbal context affects the late, but not the early, stage of fairness perception. We discuss the implications of the semiotics of the message and the messenger as a process by which parallel information sources of “who says what” are integrated in reverse order: of the message, then the messenger.

Can Brain Waves Really Tell If a Product Will Be Purchased? Inferring Consumer Preferences From Single-Item Brain Potentials

Recent research has shown that event-related brain potentials (ERPs) recorded while participants view lists of different consumer goods can be modulated by their preferences toward these products. However, it remains largely unknown whether ERP activity specific to a single consumer item can be informative about whether or not this item will be preferred in a shopping context. In this study, we examined whether single-item ERPs could reliably predict consumer preferences toward specific consumer goods. We recorded scalp EEG from 40 participants while they were viewing pictures of consumer goods and we subsequently asked them to indicate their preferences for each of these items. Replicating previous results, we found that ERP activity averaged over the six most preferred products was significantly differentiated from ERP activity averaged across the six least preferred products for three ERP components: The N200, the late positive potential (LPP) and positive slow waves (PSW). We also found that using single-item ERPs to infer behavioral preferences about specific consumer goods led to an overall predictive accuracy of 71%, although this figure varied according to which ERPs were targeted. Later positivities such as the LPP and PSW yielded relatively higher predictive accuracy rates than the frontal N200. Our results suggest that ERPs related to single consumer items can be relatively accurate predictors of behavioral preferences depending on which type of ERP effects are chosen by the researcher, and ultimately on the level of prediction errors that users choose to tolerate.

Electrical Brain Responses Reveal Sequential Constraints on Planning during Music Performance

Elements in speech and music unfold sequentially over time. To produce sentences and melodies quickly and accurately, individuals must plan upcoming sequence events, as well as monitor outcomes via auditory feedback. We investigated the neural correlates of sequential planning and monitoring processes by manipulating auditory feedback during music performance. Pianists performed isochronous melodies from memory at an initially cued rate while their electroencephalogram was recorded. Pitch feedback was occasionally altered to match either an immediately upcoming Near-Future pitch (next sequence event) or a more distant Far-Future pitch (two events ahead of the current event). Near-Future, but not Far-Future altered feedback perturbed the timing of pianists' performances, suggesting greater interference of Near-Future sequential events with current planning processes. Near-Future feedback triggered a greater reduction in auditory sensory suppression (enhanced response) than Far-Future feedback, reflected in the P2 component elicited by the pitch event following the unexpected pitch change. Greater timing perturbations were associated with enhanced cortical sensory processing of the pitch event following the Near-Future altered feedback. Both types of feedback alterations elicited feedback-related negativity (FRN) and P3a potentials and amplified spectral power in the theta frequency range. These findings suggest similar constraints on producers' sequential planning to those reported in speech production.

"You Win, You Buy"-How Continuous Win Effect Influence Consumers' Price Perception: An ERP Study

Price played an important role in most purchases. Buying behavior was strongly determined by consumers' price expectations. Emotion as a research hotspot was demonstrated to be ubiquitous in marketing and influenced purchase processing as well. This study addressed interests upon whether emotion arousal would influence consumers' price perceptions and their willingness to purchase. Compared to such emotion researches which normally adopted emotional pictures as priming stimuli, we creatively employed a two-player "Finger Play" (FP) game without monetary gains or losses to arouse subjects' emotion in the experiment. A 2 (FP Game Results: Continuous Win vs. Continuous Lose) by 2 (Price Conditions: High Price vs. Low Price) Event-Related Potentials (ERPs) experiment was designed to investigate whether game results would arouse different emotions and influence subjects' perception of product price. Both behavioral and ERP results indicated that subjects' price perception was deeply impacted by emotions induced from continuous win/lose experiences.

The Temptation of Zero Price: Event-Related Potentials Evidence of How Price Framing Influences the Purchase of Bundles

Studies have revealed that consumers are susceptible to price framing effect, a common cognitive bias, due to their limited capacity in processing information. The effect of price framing in a bundling context and its neural correlates, however, remain not clearly characterized. The present study applied the event-related potentials (ERPs) approach to investigate the role of price framing in information processing and purchase decision making in a bundling context. Three price frames were created with practically identical total prices (with a maximum difference of ¥0.1, which was about equal to 0.016 US dollars) for a bundle with two components, a focal product and a tie-in product. In normal price condition (NP), both the focal and tie-in products were offered at a normal discounted price; in zero price condition (ZP), the tie-in product was offered free while the total price of the bundle remained the same as NP; whereas in low price condition (LP), the tie-in product was offered at a low token price (¥0.1), and the focal product shared the same price as the focal product of ZP. The behavioral results showed a higher purchase rate and a shorter reaction time for ZP in contrast to NP. Neurophysiologically, enlarged LPP amplitude was elicited by ZP relative to NP, suggesting that ZP triggered a stronger positive affect that could motivate decision to buy. Thus, this study provides both behavioral and neural evidence for how different price framing information is processed and ultimately gives rise to price framing effect in purchase decision making.

Differential effects of real versus hypothetical monetary reward magnitude on risk-taking behavior and brain activity

Human decisions are more easily affected by a larger amount of money than a smaller one. Although numerous studies have used hypothetical money as incentives to motivate human behavior, the validity of hypothetical versus real monetary rewards remains controversial. In the present study, we used event-related potential (ERP) with the balloon analogue risk task to investigate how magnitudes of real and hypothetical monetary rewards modulate risk-taking behavior and feedback-related negativity (FRN). Behavioral data showed that participants were more risk averse after negative feedback with increased magnitude of real monetary rewards, while no behavior differences were observed between large and small hypothetical monetary rewards. Similarly, ERP data showed a larger FRN in response to negative feedback during risk taking with large compared to small real monetary rewards, while no FRN differences were observed between large and small hypothetical monetary rewards. Moreover, FRN amplitude differences correlated with risk-taking behavior changes from small to large real monetary rewards, while such correlation was not observed for hypothetical monetary rewards. These findings suggest that the magnitudes of real and hypothetical monetary rewards have differential effects on risk-taking behavior and brain activity. Real and hypothetical money incentives may have different validity for modulating human decisions.