The Presenter’s Paradox

December 23, 2011

According to the Journal of Consumer Research, choosing to give extra small gifts can actually diminish the value of the more valuable present you bought… in the eyes of the receiver that is.  A research team from Virginia Tech and the University of Michigan dubs this the “presenter’s paradox”.

To test the paradox, the research team conducted seven studies.  In one, a group of consumers was given the choice between an iPod Touch or an iPod Touch plus a free song download. The consumers were willing to pay, on average, $108.41 for the iPod Touch but only $86.16 for the iPod Touch and the download, TIME reports. As the study authors explain, the free song download enhanced the value in the eyes of the presenter, while cheapening the perceived value in the eyes of the consumer.

According to The Globe and Mail, another study revealed that participants perceived a $750 fine for littering as a greater penalty than a $750 fine plus two hours of community service. Lead study author Kimberlee Weaver, an assistant professor of marketing at Virginia Tech, says the addition of community service softens the impact of the fine.

Coauthor Stephen Garcia explains:

 “The addition of mildly favorable information dilutes the impact of highly favorable information in the eyes of evaluators. Hence, presenters of information would be better off if they limited their presentation to their most favorable information — just as gift givers would be better off to limit their present to their most favorite gift.”

The full study can be found here.


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