Neuroeconomics – consumption experiences

An article in the recent Eco@Otago publication, from the University of Otago in New Zealand, showed how the changing properties of a product which are unrelated to its natural characteristics can affect people’s satisfaction.

Beer with vinegar in it

Dan Ariely (of “Predictably Irrational” fame) and others carried out research in 2006 where they offered patrons at a bar two types of beer:

1. A common brew
2. A common brew with a few drops of balsamic vinegar.

They divided the testers into 3 groups:

1. They had no information about the beers’ ingredients – “blind”
2. They were told which beer had vinegar in it before tasting both – “before”
3. They were told which beer had vinegar in it after tasting both – “after”

If knowing about the vinegar has no impact on preference then the outcome of tastes tests should be the same across all groups. If knowledge about vinegar influences tastes then the results from the blind group should differ between the “before” and “after” groups. The study showed that revealing the vinegar in the brew did affect the satisfaction only if the tasters were told “before” they tried the beer. Therefore, expectations changed the satisfaction that tasters received from their drinks.

Coke or Pepsi?

A similar experiment explored the cultural influences on satisfaction. It involved a taste test with Coke and Pepsi, two similar products but each have their own cult following. This study conducted ‘functional magnetic resonance imaging’ (fMRI) while participants were tasting to identify the effect consumption of each drink had on brain function.

Participants revealed which drink they perferred and were then subject to either blind taste tests OR taste tests with information about which cola they consumed. Consumers who preferred Coke experienced greater brain activity in the prefrontal cortex, hippocampus and midbrain when they were drinking it – versus when tehy did not know it was the brand they tasted. Therefore knowledge of brand can actually produce a physical response during consumption.

Does a higher price = more satisfaction?

A similar experiment showed how economic decision-making is affected by price and satisfaction. In this study participants performed blind taste tests with fMRI scanning for 5 different types of wine. They also conducted taste tests after revealing the prices of the wines to the participants to see if their preferences depended on cost. There were two innovative elements of this study:

1. There were actually only 3 wines – two of the wines were re-administered to the participants but were assigned different prices before doing so.
2. The fMRI focused on the area of the brain believed responsible for satisfaction – the medial orbitofrontal cortex (mOFC).

Taste tests revealed that subjects exhibited more activity in the mOFC when they tasted highly-priced wine versus the same wine with a lower price tag. Therefore more expensive wines regardless of their composition led to the following:

Expected higher quality wine = higher price = physically generated enhanced experience.

Purchasing decisions are more complex than traditional textbooks describe and what goods are perceived to be has a significant influence.

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