How Do Price and Quantity Promotions Affect Hedonic Purchases? An ERPs Study

Choice overload interferes with early processing and necessitates late compensation: Evidence from electroencephalogram

Having a multitude of choices can be advantageous, yet an abundance of options can be detrimental to the decision-making process. Based on existing research, the present study combined electroencephalogram and self-reported methodologies to investigate the neural mechanisms underlying the phenomenon of choice overload. Behavioural data suggested that an increase in the number of options led to negative evaluations and avoidance of choice tendencies, even in the absence of time pressure. Event-related potential results indicated that the large choice set interfered with the early visual process, as evidenced by the small P1 amplitude, and failed to attract more attentional resources in the early stage, as evidenced by the small amplitude of P2 and N2. However, the LPC amplitude was increased in the late stage, suggesting greater investment of attentional resources and higher emotional arousal. Multivariate pattern analysis revealed that the difference between small and large choice set began at around 120 ms, and the early and late stages were characterised by opposite activation patterns. This suggested that too many options interfered with early processing and necessitate continued processing at a later stage. In summary, both behavioural and event-related potential (ERP) results confirm the choice overload effect, and it was observed that individuals tend to subjectively exaggerate the choice overload effect.

Group identity modulates bidding behavior in repeated lottery contest: neural signatures from event-related potentials and electroencephalography oscillations

A contest usually involves expenditures, termed "overbidding," exceeding the theoretical Nash equilibrium. A considerable number of studies have shown that group identity can affect decision-making and competitive behavior, thus providing a new perspective on alleviating the overbidding problem. How group identity influences brain activity when competitors bid in different groups is not yet clear, however. In this study, we implemented group identity manipulation into the lottery contest game and we recorded behavioral and electroencephalography (EEG) data at the same time. Two experimental treatments were conducted to study the effect of group identity on bidding behavior. The event-related potentials (ERP) and event-related oscillations (ERO) techniques were utilized to explore brain activity differences caused by participants' different bidding behaviors under in-group and out-group conditions. Behavioral results showed that individual expenditure was significantly lower when bidding with in-group opponents than with out-group opponents. Analyses of EEG results revealed that compared to in-group conditions, greater N2 amplitudes and theta power were found under out-group conditions. To extend previous studies, we performed supplementary analysis to explore whether enhancement of group identity had effects on conflict alleviation. Behavioral results indicated that individual expenditure was significantly lower after enhancing group identity when bidding with in-group, and EEG results showed more negative N2 amplitudes, smaller P3 amplitudes and larger theta power after enhancing group identity. Collectively, these findings indicate that group identity modulated bidding behavior, and they provide insight into a mechanism to de-escalate group conflict by enhancing group identity.

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.

How do extrinsic cues influence consumers’ online hotel booking decisions? An event-related potential experiment

Booking decision is a typical decision-making behavior in hospitality, while the neural processing of it is still unclear. To address this issue, with the help of event-related potential (ERP), this work uncovered the neural mechanism of the influence of two extrinsic cues, namely, brand familiarity (familiar vs. unfamiliar) and online reviews (positive vs. negative) on online hotel booking decisions. Behavioral results indicated that the booking rate under the condition of positive reviews was higher than that of negative reviews. In addition, the response time in the case of familiar brands was longer than that of unfamiliar brands. ERP results showed that the P200 amplitude of familiar brands was smaller than that of unfamiliar brands, while for the late positive potential amplitude, the opposite was the case. It is suggested that in the early stage of cognitive processing, unfamiliar brands evoke more automatic and unconscious attention while in the later stage, familiar brands attract more conscious attention. This study also found that the N400 amplitude of negative online reviews was larger than that of positive online reviews, indicating that negative stimuli can result in a larger emotional conflicts than that of positive stimuli. This study provides new insights into the neural mechanism of online booking decisions in the hospitality.

How does the use of simultaneous contrast illusion on product-background color combination nudge consumer behavior? A behavioral and event-related potential study

Color, as one of the most critical visual factors influencing consumer decisions, has been widely used in e-commerce marketing. However, the effects of product-background saturation combination on consumers’ willingness to purchase products with different heaviness attributes (e.g., heaviness-positive products or heaviness-negative products) have not been conclusively determined. The current study demonstrated the effects of product-background saturation combination on product heaviness perception and its downstream consequences. Based on behavioral method, study 1 showed that a patch of color placed in a pale background (the saturation of the background is lower than the saturation of the color patch) was perceived as visually heavier than that in a colorful background (the saturation of the background is higher than the saturation of the color patch). Study 2 applied event-related potentials (ERPs) method to explore the underlying neural mechanisms of how the interactions between the presentation modes and the product types affect consumer decisions. Behaviorally, compared to the colorful background, the pale background would lead to a higher purchase rate for the heaviness-positive products, whereas the opposite results were found for the heaviness-negative products. Furthermore, for both the heaviness-positive and heaviness-negative products, a shorter reaction time would be observed in the pale background condition than in the colorful background condition. Neurophysiologically, the pale background would result in smaller N2 component and larger P3 component compared to the colorful background for the heaviness-positive products, while the reverse held for the heaviness-negative products. Smaller N2 component implies decreased perceptual conflicts and larger P3 component implies increased decision confidence, suggesting that e-retailers should present heaviness-positive products with pale backgrounds and heaviness-negative products with colorful backgrounds.

The impact of empathy with nature on green purchase behavior: An ERP study

Due to the attitude-behavior gap in green consumption, it is necessary to conduct more research on consumers' actual purchase behavior. At present, few studies have been conducted on the impact of empathy with nature on green purchase behavior. This research explored the underlying neural mechanism of empathy with nature on consumers' green purchase decisions by applying the event-related potentials (ERPs) approach. Behaviorally, compared with the control group, the experimental group had a higher purchase rate of green products and spent less time when buying green products. For the experimental group, buying green products required less time than buying traditional products. At the neural level, when buying green products, the N2 and N400 amplitudes of the experimental group were smaller than those of the control group. For the experimental group, buying green products elicited a smaller N2 amplitude than buying traditional products. These findings suggested that empathy with nature could reduce consumers' decision conflict when buying green products, thereby promoting consumers' green purchase behavior.

To Each Their Own: The Impact of Regulatory Focus on Consumers’ Response to Online Information Load

Contrary to the common view that more information is always better, too much information can damage decision quality. Building on existing literature, this study identified regulatory focus as a critical factor influencing the effect of information load (IL) on online consumer decisions and used event-related potentials (ERPs) to uncover its underlying neural mechanism. Behavioral data showed that promotion-focused participants would spend less time making purchasing decisions in the low IL condition than in the high IL condition. However, no significant difference was found for prevention-focused participants. In contrast to the high IL condition, ERP data indicated that the low IL condition recruited more attentional resources at the early stage of rapid automated processing (larger P2 component), leading to reduced long-term memory conflict (smaller N2 component), and resulting in enhanced decision confidence (larger P3 component) for those with a promotion focus. However, we observed either weakened or even opposite outcomes for those with a prevention focus. These findings generally shed light on when e-retailers should provide large/small amounts of product information in online environments.

The Effectiveness of Price Promotions in Purchasing Affordable Luxury Products: An Event-Related Potential Study

Similar to traditional luxuries, affordable luxuries enjoy a high level of perceived product quality and perceived social status, but the effectiveness of price promotions of purchasing affordable luxury products is different from that of traditional luxuries. In order to further investigate the purchases of affordable luxuries, we used event-related potential (ERP) technology to reveal the formation of the purchase intention toward affordable luxuries at original prices (high or low) and current prices (discounted or non-discounted). Compared with the high-priced affordable luxury without a price promotion and the low-priced affordable luxury with a price promotion, consumers showed a stronger intention toward the high-priced affordable luxury with a price promotion, by weighing up three factors, perceived product quality, perceived social status, and perceived monetary saving at the behavioral level. A shorter reaction time emerged in the price promotion condition than in the absent price promotion condition when the original price was low. At the neural level, a decrease in N2 amplitude was found in the high original price and discounted current price condition than the high original price and non-discounted current price condition and the low original price and discounted current price condition, respectively, suggesting that the price information of the latter two conditions might not be the expectation information of subjects, and thus, the enhanced conflict is produced. The high-priced affordable luxury product without a price discount evoked a more positive LPP amplitude than the high-priced affordable luxury product with price promotions or than the low-priced affordable luxury item without price promotions, demonstrating that participants could regard the former as an evaluative inconsistent condition and the latter as evaluative consistent conditions. These results are helpful to better understand the effects of price promotions on purchasing affordable luxury products at different original prices.

Is Distant Extension Always Upset? Neural Evidence of Empathy and Brand Association Affect Distant Extension Evaluation

Distant brand extension as an essential strategy of obtaining benefits was highly focused on the normal marketing practice and academic research. In the current study, we aim to recognize that how individuals with different levels of empathy respond to distant extensions under corporate social responsibility (CSR) and corporate competence (CC) associations to explore the corresponding neural mechanisms using event-related potentials (ERPs). We divided subjects into two groups involving a high empathy (HE) group and a low empathy (LE) group according to an empathy measure questionnaire. The subjects first faced a brand name following the CSR or CC association descriptions, and then, they were asked to evaluate the new product of brand by a five-point scale. Current results revealed that the participants of the HE group were more apt to accept the distant extension products than those of the LE group. Additionally, in the HE group, products from a brand with CSR associations were more acceptable than CC associations. Moreover, a larger N2 amplitude was elicited in the LE group than in the HE group. For the LE group, an augment N2 was found under CSR than CC associations, reflecting that LE consumers might perceive conflict when evaluating distant extensions and allocate more cognitive resources to deal with CSR information. At the later stage, the HE group showed a greater P3 than the LE group. For the HE group, an increased P3 was elicited under CSR than CC associations, suggesting that empathic individuals might show motivational salience and helping willingness toward distant extension products, especially under the CSR scenario. These results provide potential electrophysiological evidence for the positive impact of brand associations on the evaluation of distant brand extension in the case of subdividing different empathic individuals.

How Does Information Overload Affect Consumers' Online Decision Process? An Event-Related Potentials Study

One of the advantages of e-retailers is their capability to provide a large amount of information to consumers. However, when the amount of information exceeds consumers' information processing capacities, it will lead to worse decision quality and experience, causing the information overload effect. In this study, the event-related potentials (ERPs) were applied to examine the hidden neural mechanism of the impact of information overload on consumers' decision processes. Behavioral data showed that people would spend more time making decisions when faced with information overload. Neurophysiologically, consumers would invest less attentional resources in the high amount of information (HAI) condition than those in the low amount of information (LAI) condition and lead to less positive P2 amplitudes. The HAI condition would increase decision difficulty than would the LAI condition and result in smaller P3 amplitudes. In addition, an increased late positive component (LPC) was observed for the HAI condition in contrast to the LAI condition, indicating that consumers were more inclined to have decision process regret when consumers were overloaded. We further investigated the dynamic information processing when consumers got over information overload by mining the brain's time-varying networks. The results revealed that during the decision process and the neural response stage, the central area controlled other brain regions' activities for the HAI condition, suggesting that people may still consider and compare other important information after the decision process when faced with information overload. In general, this study may provide neural evidence of how information overload affects consumers' decision processes and ultimately damages decision quality.

Neural Bases of Brand Reputation Effect on Extension Evaluation: An ERPs Study

Brand extension, as a marketing strategy, is frequently utilized by enterprises to produce new products. There exist several critical factors determining its success, such as brand reputation and perceived fit. The present study adopts the event-related potentials (ERPs) method to explore the underlying neural mechanism of the joint influence of the two factors on consumers’ evaluation of brand extension. Specifically, consumers were presented with a brand with corporate social responsibility (CSR) or corporate ability (CA) reputation, following attached to an extension product (high fit vs. low fit). And then, they were given a 5-point scale to report their acceptance intention (AI) toward the brand extension. Behavioral data showed a higher AI and a shorter reaction time for high fit in contrast to low fit conditions. For low fit conditions, consumers were more inclined to accept the extension product with a brand with CSR than CA reputation. Neurophysiologically, CSR reputation evoked a larger P2 amplitude and LPP amplitude than CA reputation. Moreover, the low fit conditions elicited a more positive LPP amplitude than the high fit conditions in the context of a brand with a CSR reputation. Yet, for a brand with a CA reputation, the effect of perceived fit was not found. These results may reflect early attention resources engagement and altruistic motivation at the late stage during brand extension evaluation. The findings provided neurological evidence for which of the two types of brand reputation (CSR vs. CA) have a more positive effect on brand extension.

The Effect of Social Distance on Intertemporal Choice of Reward Processing: An Event-Related Potentials Study

Social factors can affect the processing of intertemporal choice, but the influence of social distance on the rewarding process of intertemporal choice is unclear. Therefore, by designing a novel cognitive resource competition paradigm for undifferentiated intertemporal choice, this article aims to explore the influence of social distance on intertemporal choice reward processing at the electrophysiological level. It was found that compared with the stranger condition, P3a is greater in the friend condition, which means social distance is evaluated in the early stage. In addition, different brain regions in the early stages are taking charge of processing the soon-but-small (SS) and later-but-lager (LL) reward in intertemporal choice. There is an interaction effect between social distance (friend vs. stranger) and intertemporal choice (SS reward vs. LL reward) on P3b. Under friend conditions, the P3b induced by LL reward is more positive than SS reward. Under the condition of choosing the LL reward, the P3b induced by friend is more positive than stranger. This result shows that in the latter stage of reward processing, the evaluation process of time discounting is less sensitive in LL reward for friend caused by lack of cognitive resources which is occupied when dealing with social distance in advance, and thus the degree of time discount was reduced. These findings demonstrate that P3b is the key index of time discounting and immediate and delayed rewards are valued in different brain regions.

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.

Symbolic Product Superiority in the Neural Salience of Compensatory Consumption Behavior

To cope with self-threat being induced by personal setbacks in daily life, compensatory consumption, especially on symbolic product, has been found to do valuable help to resolve discrepancies between ideal and actual self-concept. Conforming to symbolic self-completion theory, the current study adopted event-related potentials to explore the objective information processing stages in self-concept-impaired status (the defeat group) on a neural level. The behavioral results replicated previous findings that the defeat group gained stronger purchase intention for symbolic products than utilitarian products. The electrophysiological data demonstrated that perceptual difficulties for products in preliminary stage (N1) were steady among conditions, and after that, information processing separation emerged. In contrast to the individuals with a draw experience, those with a defeat experience raised highly focused attention (P2) and eager expectation (N2) for products, especially for symbolic ones. Meanwhile, symbolic (vs. utilitarian) products also evoked a higher emotional arousal level and slowed the diminishment of involved attentional resource (late positive potential) at late cognitive processing stage. Taken together, the sequential integration of multiple neural indicators contributes to elucidating the processing stages of compensatory consumption behavior.

Effect of brightness of visual stimuli on EEG signals

The aim of this study was to examine brightness effect, which is the perceptual property of visual stimuli, on brain responses obtained during visual processing of these stimuli. For this purpose, brain responses of the brain to changes in brightness were explored comparatively using different emotional images (pleasant, unpleasant and neutral) with different luminance levels. In the study, electroencephalography recordings from 12 different electrode sites of 31 healthy participants were used. The power spectra obtained from the analysis of the recordings using short time Fourier transform were analyzed, and a statistical analysis was performed on features extracted from these power spectra. Statistical findings were compared with those obtained from behavioral data. The results showed that the brightness of visual stimuli affected the power of brain responses depending on frequency, time and location. According to the statistically verified findings, the increase in the brightness of pleasant and neutral images increased the average power of responses in the parietal and occipital regions whereas the increase in the brightness of unpleasant images decreased the average power of responses in these regions. Moreover, the statistical results obtained for unpleasant images were found to be in accordance with the behavioral data. The results revealed that the brightness of visual stimuli could be represented by changing the activity power of the brain cortex. The findings emphasized that the brightness of visual stimuli should be viewed as an important parameter in studies using emotional image techniques such as image classification, emotion evaluation and neuro-marketing.