consumerchoicebetweenhedonicandutilitariangoods.pdf

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RAVI DHAR and KLAUS WERTENBROCH*In this article, the authors examine how consumer choice between he-donic and utilitarian goods is influenced by the nature of the decision task.Building on research on elaboration, the authors propose that the relative

salience of hedonic dimensions is greater when consumers decide whichof several items to give up forfeiture choices) than whe n they decidewhich item to acquire acquisition choices ). The resulting hypothesis thata hedonic item is relatively preferred over the same utiiitarlan item in for-feiture choices than in acquisition choices was supported in two choiceexperiments. In a subsequent experiment, these findings were extendedto hypothetical choices in which the acquisition and forfeiture conditionswere created by manipulating initial attribute-level reference states in-stead of ownership. Finally, consistent with the experimental findings, afield survey showed that, relative to market prices, owners of relatively he-donic cars value their vehicles more than do owners of relatively utilitar-ian cars. The authors discuss theoretical implications of these reference-dependent preference asymmetries and explore consequences formarketing managers and other decision makers.

Consumer Choice Between Hedonic andUtilitarian GoodsConsumer choices are driven by utilitarian and hedonicconsiderations. Consumers choosing among new automo-biles, for example, may care about utilitarian features (e.g.,gas mileage) as well as about hedonic attributes (e.g., sportydesign). Research sugge.sts that these different considera-tions map onto independent components of product evalua-tions and attitudes and enable people to distinguish betweengoods according to their relative hedonic or utilitarian na-ture (Batra and Ahtola 1990; Mano and Oliver 1993).Broadly speaking, hedonic goods provide more experientialconsumption, fun, pleasure, and excitement (designerclothes, sports cars, luxury watches, etc.), whereas utilitar-ian goods are primarily instrumental and functional (mi-crowaves, minivans, personal computers, etc.; Hirschman

and Holbrook 1982; Strahilev itz and Myers 1998). If con-

*Ravi Dhar is Associate Professor of Marketing. Yale School ofManagem ent (e-mail: [email protected]) Klaus Wertenbroch is AssistantProfessor of Marketing, INSEAD (e mail: [email protected]).This article has benefiled from the commen ts of Steve Hoch, Eric Johnson,Daniel Kahneman. Ann McGill. Subrata Sen. Itamar Simonson, and threeanonymous MR reviewers. The authors thank Mike Ziolkowski at theDecision Research Laboratory at the University of Chicago for his helpwith pan of Ihe data collection and Ecole des Hautes Etudes Commercialesfor funding, which we received as visiting researchers there. To interactwith colleagues on specific articles in this issue, see Feedba ck on the MR Web site at ww wam aorg/pu bs/jtnr.

sumers make choices between goods or characteristics withsuch different appeal, an account of consumer behaviorneeds to address the manner in which they make these fun-damental trade-offs.In this article we examine consumer choice between twogoods, one of which is seen as superior on a hedonic di-mension and the other is seen as superior on a utilitarian di-mension. We compare preferences for these goods in an ac-quisition c ondition, in which the consumer chooses which ofthe two to acquire, and in a forfeiture condition, in which theconsumer chooses which of the same two items to give up.On the basis of the literature on the effect of elaboration onmessage evaluation (e.g., Tybout and Artz 1994), we pro-pose that greater spontaneous elaboration in forfeiture

choices increases the impact of hedonic aspects in overallevaluation. As a result, relative preferences for hedonic ascompared with the same utilitarian goods will be stronger inforfeiture than in acquisition choices. Consistent with ourunderlying theory, we show that the predicted asymmetrycan be attenuated using a thought-listing task that sup-presses the differential elaboration on the hedonic and utili-tarian dimensions.We further propose that even in the absence of actual pos-session a choice can be framed as a forfeiture or as an ac-quisition decision on the basis of the attribute levels thatcharacterize a reference option. Consider, for example,someone who is debating between two apartments. One has

ournal ofMarketinf Research


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Hedonic and Utilitarian Goods 6

a nicer view (a relatively hedonic feature), but the other pro-vides a shorter commule to work (a relatively utilitarian fea-ture). If the person's current aparlmeni has a nice view anda short commute, the choice will he viewed as a forfeituredecisiona trade-off hetween a loss of quality of view anda loss of commuting convenience. In contrast, if the currentapartment has a poor view and a long commute, the choiceappears as an acquisition decisiona trade-off between again in quality of view and a gain in commuting conven-ience. We propose an increase in the relative preference forthe apartment that is superior on the hedonic dimensionwhen the decision is viewed as forfeiting a benefit ratherthan acquiring a benefit. We show that this asymmetry inpreferences due to the manipulation of the reference optioncan also be expressed in terms of differential loss aversionfor hedonic and utilitarian attributes (see Tversky and Kah-neman 1991).The remainder of the article is organized as follows. Abrief review of prior research relevant to reference effectsand the role of elaboration in decision making leads to ourprediction of asymmetric preferences for hedonic and utili-tarian products in forfeiture and acquisition choices. Next,

we test this prediction in three experiments involving realand hypothetical choices. As is illustrated in the apartmentexample, we use simple manipulations that determinewhether the hedonic-utilitarian trade-offs involve forfeitingor acquiring benefits. We then illustrate marketplace impli-cations of the experimental results in a field survey withused car data. We conclude with a discussion of the theoret-ical and managerial implications of our findings for pricing,promotion, and product modification strategies, which sug-gests that relative market shares for hedonic as comparedwith utilitarian products may depend on the frame of refer-ence used to evaluate these products.PREFERENCE FORHEDONJ ND UTILIT RI NGOODS IN CQUISITION VERSUS FORFEITUREDECISIONS

Although the consumption of many goods involves bothdimensions to varying degrees (Batra and Abtola 1990),there is little doubt that consumers characterize some prod-ucts as primarily hedonic and others as primarily utilitarian.We define hedonic goods as ones whose consumption is pri-marily characterized by an affective and sensory experienceof aesthetic or sensual pleasure, fantasy, and fun (Hirschmanand Holbrook 1982). Utilitarian goods are ones whose con-sumption is more cognitively driven, instrumental, and goaloriented and accomplishes a functional or practical task(Strahilcvitz and Myers 1998). Similar to these findings onperceived product characteristics, recent work by Bazerman,Tenbrunsel, and Wade Benzoni (1998) suggests that we candistingu ish betwee n affective preferences ( wa nts ) andcognitive or reasoned preferences ( shoulds ) that underlieconsumer choice (see Shiv and Fedorikhin 2000;Wertenbroch 1998).' The want/should distinction is broadlycompatible with the distinction between bedonic and utili-tarian goodsitems that are high on hedonic value arelikely to be subject to want preferences, and items that are

'Wenenbroch (1998) disdnguishes between vice and virtue goods,providing a formal conceptualization of goods that are subject to impulsivepreferences.

high on utilitarian value are likely to be subject to shouldpreferences. What has not been examined previously, how-ever, is whether evaluations of hedonic and utilitarian di-mensions and consequently the trade-offs between tbem aresystematically affected by tbe choice task.Our focus on differences between acquisition and forfei-ture choices is motivated by the research on loss aversionthat demonstrates an asymmetry in evaluations dependingon the direction of the proposed trade, that is, whether agood is being acquired or forfeited relative to the con-sumer's present state (Kahneman, Knetsch, and Thaler1990; Tversky and K ahneman 1991). The conclusion fromthis body of work is that an item that is to be traded is gen-erally valued more when it is part of one's endowment thanwhen it is not. However, to the extent that both a bedonicand a utilitarian item are valued more wben they are for-feited than when they are acquired, the concept of loss aver-sion by itself does not provide any insight into relative as-sessments. Because acquisition and forfeiture choicespotentially involve different decision processes, we rely onthe compatibility principle that suggests that the evaluationof stimulus components may depend on the particular eval-

uation task, affecting the decision maker's relative prefer-ences am ong the options (Shafir 1993;Tversky, Sattath, andSlovic 1988).Previous research suggests why trade-offs between bedo-nic and utilitarian dimensions depend on tbe task. For ex-ample, a choice (as opposed to rating) task generally favorsthe option that is higher on the utilitarian dimension. Tver-sky and Griffin (1991; Shafir, Simonson, and Tversky 1993)propose that decision makers search for reasons and argu-me nts to justify the ir choices. Sim ilarly, Tversky, Sa ttath,and Slovic (1988) show that alternatives that provide deci-sion makers with compelling and justifiable arguments aremore likely to be preferred in choice ta sks. In line with this

view, Btihm and Pflster (1996) show that contexts that fos-ter justification enhan ce preferences for utilitarian features.Recently, Bazerman, Tenbrunsel, and Wade-Benzoni (1998)bave suggested that choice forces decision makers to tbcuson should preferences so that they are more likely to favormore utilitarian options. In summary, choice tasks enhancethe relative salience of utilitarian consequences in overallevaluation in both acquisition and forfeiture.Yet because acquisition and forfeiture cboices representdifferent choice tasks, the evaluation of each stimulus willalso depend on differences in how consum ers process thesetasks. We propose that forfeiture choices stimulate morespontaneous elaboration than do acquisition choices, and wesuggest two reasons for this differential elaboration. First, itis likely that the more time consumers have to examine andinteract with the object in the forfeiture condition, the morethey will tend to elaborate on tbe object's potential benefits(see Strahilevitz and Lo ewen stein 1998). Yet, although theextent to which consumers engage in elaboration dependson the time or resources available, it is unlikely to be thesole cause of differential elaboration. A second argument forgreater elaboration in the forfeiture condition builds on theliterature on counterfactual thinking. Counterfactuals aremental representations of alternative realities compared withthose actually obtained. Researcb distinguishes betweencomparisons of actual outcomes with more preferred alter-natives (i.e., upward counterfactuals) and comparisons with


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62 JOURN AL OF MARKETING RESEARC H FEBRUARY 2000less preferred altern atives i.e., downwa rd coun terfactuals)and suggests that upward counterfactuals are spontaneouslygenerated more frequently than downward counterfactuals Roese and Olson 1997).- Recent research has extendedthese ideas to prefactual thinking, that is, the imagination ofalternative possible outcom es prior to choice Sanna 1996).These findings suggest that consumers are more likely toelaborate spontaneously on alternative future outcomeswben tbey have to forfeit an item i.e., an upward prefactual)than when they acquire an item i.e., a downw ard prefactual;see also Carmon and Ariely 2000). For example, someonewho has so far enjoyed a nice view and a short commute towork from his or her apartment but now has to forgo one ofthese two features in deciding between two new apartmentsis more likely to imagine what it is like not to have the viewand the commute and contrast this with the old apartmentthan someone who has not possessed these features in thepast and is about to acquire one of tbem. In summary, wepropose greater elaboration in forfeiture choices.We also propose tbat the presence of such differentialspontaneous elaboration in the forfeiture choice conditionenhances the relative valuation of hedonic attributes. This isbased on two arguments. First, a well-documented findingin tbe literature is tbat elaboration on a positive stimulusmessage can enhan ce the favorableness of judgm ent Ty-bout and Artz 1994). Thus, imagining the use of a superior.

reason for this asymmetry in counlerfactual thinking is ihal thenegative affecl associated wilh worse outcomes is more likely to trigger Iheimagination of better) altematives to reality Kahneman and Miller 1986;Roese 1997). A second, adaptive reason is thai people w ho experience neg-ative or unpleasant outcomes are more likely to focus on actions thai couldhave been taken to avoid these oulcom es Lewin \ ^^: Roese 1997).

positively valued item should increase its attractive ness seeShiv and Huber 1999; Strahilev itz and Loew enstein 1998).In particular, elaboration increases the intluence of moreeasily imaginable attributes on product evaluations, makingthem more salient Keller and McG ill 1994; Sherman et al.1985; Shiv and Huber 1999). To the extent that hedonic at-tributes are more sensory and imagery-evoking Ma clnnisand Price 1987), tbe relative attractiveness of an item tbat issuperior on the bedonic dimension sbould thus be enhance d.Second, upward prefactual thinking induces negative emo-tions, because one is about to be worse off tban before Roese 1997; Sanna 1999). To the extent that forfeiturechoices spontaneously trigger upward comparisons thathighlight negative) affective consequ ences, respondentsmay be motivated to minimize the anticipated negativeemotions by retaining the more hedonic good. Figure I sum-marizes the proposed process, by which differential elabo-ration influences tbe relative salienee of bedonic and utili-tarian attributes.

This leads to the following hypothesis about choices be-tween hedonic and utilitarian goods. Consider consumerswho may have to choose one of two options neither of whichthey currently own; alternatively, consider consumers whomay have to forfeit one of two options, both of which theycurrently own. Although the two decisions are logicallyequiva lent i.e.. the choice sets are identical), we predict thathedonic attributes will be weigbed more beavily in relativeterms wben consumers are deciding which one of two op-tions to give up as opposed to which one of two options toacquire. We now test this hypothesis in three experimentsand a field survey. The first two experiments show how rel-ative preferences for hedonic and utilitarian goods canFigure 1

DIFFERENTIAL ELABORATION IN ACQUISITION AND FORFEITURE CHOICES

DECISION TASKACQUISITION CHOICE

Less elapsed lime till taskSpontaneous prefactuals less likely Less spontaneous elaboration

Relative salience of andpreference forutilitarian features

FORFEITURE CHOICEMore elapsed time till task

Spontaneous prefactuals more likely More spon taneous elaboration

Hed onic features easier toimagine and elaborate on

Relative salience of andpreference forhedonic features


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Hedonic nd Utilitarian Goods 63changeas aresultof whether subjects cboose whichofthemto acquireorwhichofthemto forfeit. Experiment2alsoin-volves examining theroleofelaborationin tberelativeas-sessment of hedonic and utilitarian goods. Experiment 3shows thatour predictions for ownership-dependent acqui-sitionandforfeiture choices also applyto reference depend-encein tbeabsence of actual possession. Finally, tbefieldsurvey sbows that, relativetomarket prices, ownersofrela-tively bedonic cars value their vehicles more than do own-ersof relatively utilitarian cars.EXPERIMENT I: FORFEITURE V RSUSACQUISITION

CHOICE BETWEEN HEDONIC AND UTILITARIANGOODSMethod

Fifty-one undergraduate and graduate studentsat a pri-vate Midwestern university were recruited for this experi-ment with flyers posted around the campus. The stimuliweretwogift certificates with 7 face values,one for an au-dio tape(or as partial paymentfor acompact discICD|) ofthe subjects' choiceat a nearby local record store,theotherfora lO-pack of brand-name computer disksat the nearbyuniversity book store. These stores were cbosentoequalizetransaction costs.

Tbe between-subjects experimental design consisted ofan acquisition conditionand a forfeiture condition. Subjectswere randomly assigned to one of tbe twoconditions.Thedependent variable was subjects' choices between the giftcertificates. Subjectsin both conditions were shownthe twocertificates when they enteredthelaboratory.In theacquisi-tion condition, they were told that they would first needtofill outaseriesofquestionnairesand then could chooseoneofthe certificates ascompensation. In contrast, subjectsinthe forfeiture condition were told at the outset tbat theycould keep botb certificates as compensation. When theyhad completed the (unrelated) questionnaires, the experi-menter asked subjectsin theacquisition conditiontochooseoneof the certificates. She informed subjectsin tbe forfei-ture condition tbat there had beena procedural error wbenshebadgiven away both gift certificatesandtherefore askedthem to return one certificate. After recording subjects'choices,the experimenter debriefed tbem aboutthepurposeof the experiment and gave them back tbe gift certificatetbat theyhadjust returned. Thus, subjects in theacquisitioncondition received one 7 certificate, whereas subjects intbe forfeiture condition ultimately received a total of 14worthof certificates.

ResultsandDtscitssicmPretest Wechosethe two gift certificates as stimulionthe basisof the resultsof twopretests.In the first pretest,whichwe adopted from StrahilevitzandMyers (1998),sub-jects from the same population categorized several everydayconsumer goods as primarily utilitarian (defined as useful,practical, functional, something that helps achieve a goal,e.g., a vacuum cleaner), as primarily hedonic (defined aspleasantand fun. something thatisenjoyable andappealstotbe senses,e.g.,perfume),asboth utilitarianandbedonic,oras neither.The majority of subjects classified music audiotapesand CDs as primarily hedonic(17 of22 subjects, x~ =6.55,p .02) andcotnputer disksas pritiiarily utilitarian(18of22subjects, X =8.91 , /J


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64 JOURNAL OF MARKETING RESEARCH, FEBRUARY 2000preferences between hedonic and utilitarian goods in the ac-quisition and forfeiture choices should be smaller when theylist reasons before choosing than when they do not.etho

One hundred fourteen undergraduate students from a pri-vate Northeastern university were recruited in their collegedormitories. Subjects were run in small batches of severalindividuals. In return for their participation in an unrelatedquestionnaire study, they were offered a large pack ofM&M's chocolate candies and a UHU glue stick, each witha retail value of approxim ately 1.25.The study design was a 2 x 2 between-subjects full facto-rial. Similar to Experim ent I, the first factor manip ulatedwhether subjects decided between the alternatives in a for-feiture or acquisition condition. In the acquisition condition,subjects were first shown the two items and were told thatthey would have to choose one of them as compensation atthe end of the study. Next, they filled out the unrelated ques-tionnaire and then made their choice. In the forfeiture con-dition, subjects were given both items at the beginning ofthe procedure and were told that these were theirs to keep ascompensation for their participation. Upon completion ofthe questionnaire, the experimenter informed these subjectsthat there had been a procedural error and asked them to re-turn one of the items. To prevent subjects in the forfeiturecondition from feeling misled to expect to receive twoitems, they were told that they would later be provided witha consolation item. After recording each subject's decisionof wbich Item to forgo, the experimenter debriefed subjectsand gave back the forfeited item. The second factor w as in-tended to suppress differential spontaneous elaboration inthe forfeiture condition. Specifically, subjects were asked towrite down the reasons they would like to own M&M's andglue sticks. Subjects in the control group received no suchinstructions. Subjects were randomly assigned to the fourconditions.Results and Discussion

Pretests.The stimuli had been selected on the basis of theresults of two pretests with samples from the same subjectpopulation. The first pretest was the same as the one used indesigning the stimuli for Experiment 1and showed that themajority of subjects regarded M&M's as primarily hedonic(40 of 46 subjects, x' = 25.13, /?< .001) and UHU gluesticks as primarily utilitarian (34 of 46 subjects, x~ =10.52,p


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Hedonic and Utilitarian Goods 65having lost the more utilitarian of the same two goods. * Inone scenario, they had each won the two $7 gift certificatesdescribed in Experiment I (i.e., one for an audio tape or CDof tbe perso n's ebo ice, the other for a 10-pack of disks). Ahad subsequently lost the music certificate but not the diskcertificate, whereas B had lost the disk certificate but not themusic certificate. In another scenario, A and B had each wona small bag of M&M's and a UHU glue stick. A had subse-quently lost the M&M's but not the glue stick, whereas Bhad lost the glue stick but not the M&M's. Note that thesescenarios paralleled the forfeiture conditions in Experiments1 and 2, except that forfeiture resulted from a loss in cir-cumstances beyond the target person's control (theft orbreakage) rather than from choice.

Sixty-seven subjects compared on nine-point rating scales(I) which of the target persons felt worse and (2) whichmissed the lost prize more (I = A who lost the music certifi-cate/M &M 's, 9 = B who lost the disk certificate/glue stick).Subjects predicted that the target person who lost the hedo-nic music certificate would feel worse (t = -6 .17 , p < .0001)and miss the item more (t = -9. 16 , p< .0001) than would theperson who lost the utilitarian disk certificate. Similarly,subjects predicted that the person who lost the hedonicM&M's would feel worse (t =-3 .18 , p < .01) and miss theitem more (t - -2.47,p


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66 JOURNALOFMARKETING RESEARCH , FEBRUARY 2000ternatives,one ofwhichwassuperior in autilitarian attrib-ute (point fin Figure2), and theother was superior in a be-donic attribute (pointh inFigure 2),allelse being equal.Anexample isprovided in theAppendix.Thealternatives wereas follows:

apartments: utilitarian attribute, distance towork 10tninutesversus45tninutes); hedonic attribute, view from theapartment(breathtaking viewofsunsetandcity skyline versus viewof aparkinglot).coworkers: utilitarian attribute, reliahility (very reliable versusnot very reliable); hedonic attribute,fun to work with a lot offun versus somewhat arrogant).

college luncfi pians: utilitarian attribute, walking distance locafeteria 5 minutes versus 10 minutes); hedonic attribute.dessert menu (cookies, pastry,andfresh fruit fordessert versusno dessert).sfiatnpoos: utilitarian attribute, cleansing efficacy (very effec-tive cleansing agent versus moderately effective cleansingagenl); hedonic attribute, softness of hair (hair feels softandsilky versus hair feelsdryafter shampooing).Wehadconducted apretest to ensure that these pairsof

attributes differed in their hedonic and utilitarian contentand that the more hedonic attributes werenotseen asmoreimportant than the corresponding utilitarian attribute s.Thirty-five subjects ratedtherelative hedonicandutilitariancontent aswellas the importance of each attribute usedinthe four problems. Usinga measure adopted from Leclerc,Scbmitt, and Dube (1994), the hedonic ratings werean-chored at 1= utilitarian and 9 = hedonic, where thetermsutilitarian and hedonic were defined as in the pretests inExperiments 1 and 2, and the importance ratings werean-choredat I = not at all importantand 9=very important.A brief cover storyfor eacb problem manipulated the ref-erence item.Inthe superior reference item condition (equiv-

alent to a forfeiture condition; points inFigure2),subjectswere instructed to imagine themselvesas currently consum-ingan alternative thatwascharacterized by superior valuesin botb attributes (e.g., a 10-minute drive to work and abeautiful viewofth sunset from their current apartment).Incontrast,m the inferior reference item condition (equivalenttoan acquisition condition; point i inFigure 2),they wereasked toimagine themselvesas currently consuming an al-ternative that was characterizedbyinferior va luesinbothat-tributes (e.g., a 45-minute drive to work and a view of aparking lot from their apartment). In botb conditions, theywere told that they thenhad toswitchto one ofthetwo de-cision alternatives (e.g., because theyhad to move out oftheir current apartment). Subjects were randomly assignedtothe twocond itions. The dependent variablewassubjects'cboices.ResultsandDiscussion

Pretest Thepretest results supportedourm anipulationofthe relative hedonic and utilitarian content and importanceof the attributes. First, subjects distinguished clearly be-tween hedonic and utilitarian attributes in all four cases.Distancetowork was seenas ahighly utilitarian attributeofapartments (M=1.80),whereastheview from anapartmentwas rated as highly hedonic M - 7.86; t = -16.52, p


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Hedonic and Utilitarian Goods 67Table 3 K M

LOGIT ANALYSIS PARAMETER ESTIMATES FOR PREDICTINGTHE PROBABILITY OF PREFERRING THE ALTERNATIVE THATIS SUPERIOR IN THE HEDONIC ATTRIBUTE IN EXPERIMENT 3

InterceptSuperior reference itemApartmentsLunch plansShampooLog-likelihoodChi-squaredfn

ParameierEslimtiie- . 66*.70*.65***.24I .I6*

-388 .5340.35* 4564

SumdardError.20M.25

.0001 ; / ? < . 0 1 .

jS*y-more likely to ehoose the alternative that was supe-rior in the hedonic attribute when the decision was madegiven a superior reference item than when it was made givenan inferior reference item (PSUPERIOR REFERENCE ITEM= -70;/7


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68 JOURNAL OF MARKETING RESEARCH FEBRUARY 2000effect on the results. We regressed the ratio of reservationprices to Bluehook prices on the natural logs of the originalpurchase price and mileage, as well as on the year the carwas built, subject s perceived unique ness ratings, and acomposite measure of subjects ratings of the hedonic andutilitarian cha racteristics ofth eir vehicles. This measure w asthe difference between each individ ual s hedonic and utili-tarian ratings. Thus, values could range from -8 (indicatingpurely utilitarian vehicles) to 0 (indicating vehicles tbat areseen as both utilitarian and hedonic or as neither) to +8 (in-dicating purely hedonic vehicles).

As predicted, the greater the net hedonic content of tbe ve -hicle, the higber the ratio of respondents stated selling reser-vation priees to market prices ( PUIFFERENCE = f* P ^.001). Owners of hedonic cars were more reluctant to partwith them than were owners of utilitarian cars. Am ong tbecontrol variables, only mileage ( P M I L E S = -0 8 5; p< .05) andoriginal purebase prices ( P B O U G H T . P R I C E - ^0 ; p .(XX)1)affected the ratio of WTA to market prices, whicb suggestspossible usage rate and income effects on buyer-seller pricegaps for used cars. Tbere was no evidence of multicollinear-ity in the independent variables. In summary, tbis study il-lustrates marketplace implications of our experimental re-sults that show tbat hedonic aspects loom larger in forfeiture(e.g., selling) tban acquisition (e.g., buying). Includinguniqueness ratings and original purcbase prices in our analy-sis controls for the rival explanation that hedonic cars, whichmigbt be more expensive tban utilitarian cars, are seen bytbeir owners as unique collectibles with bigh investmentvalue. We note, however, tbat this nonexperimental fieldstudy can only provide suggestive evidence consistent withour bypotbesis but naturally cannot confirm it.

GENERAL DISCUSSIONP revious research has sbown that consumer p erceptionsand preferences bave both bedonic and utilitarian dimen-sions. We demonstrate a fundamental asymmetry in bowconsumers trade off these dimensions in acquisition and for-feiture choices. Our data consistently show an increase inthe weight of tbe hedonic aspects in forfeiture cboices.E xperimen ts I and 2 manipulated real ownership of two dif-ferent pairs of products. Subjects in both experiments showa relative increase in the preference for tbe bedonic good inforfeiture compared witb acquisition ch oices. E xperiment 2also showed that this effect is moderated by the relativesalience of bedonic considerations in tbe forfeiture condi-tion. Tbis was predicted on the basis of tbe notion tbat tbeincreased opportunity for spontaneous elaboration in forfei-

ture enhances the evaluation of hedonic goods. Experiment3 replicated the preference asymmetry by inducing a forfei-ture frame tbrough a simple attribute-level reference pointmanipulation instead of imposing real losses or gains onsubjects. Finally, the field survey sacrificed experimentalcontrol to illustrate marketplace implications of the asym-metry in forfeiture and acquisition choices. Owners of he-donic cars valued their vehicles more tban did owners ofutilitarian cars, relative to market prices.Tbe series of studies limits the effect of alternative ac-counts of why consum ers may be m ore reluctant to part witb

The res ults re flecl Bluehimk prices for cars in g(X)d condilion and aresimilar for vehicles in excellent condilion.

bedonic tban witb utilitarian goods. Work by Belk (1988)suggests tbat consumers develop symbolic relationshipswitb tbeir possessions. If tbese relationsbips are stronger forhedonic tban for utilitarian possessions, consumers migbtreasonably value sucb options more over time. However, theduration of ownership in E xperiments 1 and 2 appears toobrief for such differences in relationsbips to develop.^ A re-lated argument can be derived from Hanemann (1991), inwbicb he argues tbat consumers true selling prices (WTA)are a function of the substitutability and tradability of tbegood to be traded. If hedonic goods are more unique and ir-replaceable (e.g., a bridal gown), perhaps because we de-velop emotional attachments to them over time, consumersmight be more reluctant to forfeit tbem. Altbougb possiblein general, tbese arguments do not apply to E xperiments 1and 2, in wbicb tbe alternatives used were widely availablemarket goods. Moreover, we controlled for the effect of sub-stitutability in tbe field survey by including perceiveduniqueness as a covariate in the analysis. In practice, tbesealternative processes are likely to enhance tbe strengtb of tbephenomenon, providing promising areas of further research.

Similarly, another rationale for greater preferences forutilitarian items in acquisition choices can be derived fromKabn and Meyer (1991), In wbicb tbey show that tbe sub-jective importance of attributes tbat are seen as enbancing orpreserving a status quo can be altered by the level of attrib-ute uncertainty. Specifically, they show that increasing tbisattribute uncertainty increases the weight of preserving at-tributes and diminishes the weight of enhancing attributes. Ifpeople consider utilitarian goods a means of preserving ben-efits in day-to-day life (e.g., a fork is a means of avoidingeating with one s bands) and bedonic goods are thought ofas tools that provide enhancements (e.g.. wine is a tool forenhancing the quality of a meal), then the weight of utilitar-ian (i.e., preserving) attributes would increase in acquisitioncboices if these are characterized by greater attribute uncer-tainty.y However, it is highly unlikely that there was a dif-ference in attribute uncertainty between tbe acquisition andforfeiture conditions in our experiments. We used marketgoods, with whicb subjects in botb conditions bad similarprior experience, and tbe opportunity for incremental learn-ing in tbe experiments was limited.

The asymmetry in preference for the hedonic good be-tween tbe acquisition and forfeiture frames is potentiallyconsistent with findings on tbe omission bias (Baron and R i-tov 1994; Spranca, Minsk, and Baron 1991). Baron and col-leagues report that consequences arising from action orcboice induce greater feelings of responsibility than do con-sequences arising out of inaction or omission. It tbere isgreater guilt associated with choosing a hedonic item (seeStrahilevitz and Myers 1998) and if retaining bedonic goodsinduces less guilt than acquiring them, hedonic items maybe relatively less preferred in acquisition cboices. However,tbere are several reasons this argument does not provide avalid rival explanation for our findings. The hedonic stimuliin our studies are fairly regular consumption items. More

R ecenl research suggests that even short incremenis in duration of own-ership may affect absolute valuations (Strahileviiz and Loewenslein 1998)but makes no predictions about differential evaluations. Further researchmight examine whether such differences exist for hedonic and utilitariangotxis. We thank an anonymous reviewer for this suggestion.


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Hedon ic and Utilitarian oods 69important, subjects in the forfeiture condition also made ac-tive choices instead of receiving an item as the result of in-action. Thus, both conditions should have induced an equaldegree of rcsponsihility and guilt in suhjects. Furthermore,the data described at the end of Experiment 2 showed thatthe loss of a hedonic good was evaluated worse, even whenno choice occurred and when it was described as the resultot circumstances not under the protagonist's control (i.e.,theft or breakage).Finally, we tested this rival explanation directly by exam-ining whether acquisition choices are seen as inducing moreguilt than are forfeiture choices. Following Spranca, Minsk,and Baron {1991), we asked subjects to evaluate the degreeof guilt felt by two hypothetical persons for choosing a he-donic good. A forfeiture condition was created by describinga person who had mistakenly received both a hedonic{M M's or CD certificate) and a utilitarian {glue stick ordisk cerlificale) prize in a lottery and then had to forfeit oneof them when the mistake was di.scovered. In an acquisitioncondition, a person was simply described as having won achoice hetween the same two items. Both persons were de-picted as having selected the hedonic item. A random sam-ple of 80 passengers at a regional airport rated on a nine-point scale the amount of guilt the target persons felt as aresult of selecting the hedonic item in the acquisition andforfeiture conditions. The mean guilt ratings for selectingthe hedonic item were not significantly different in the for-feiture and the acquisition conditions {M = 2.69 and M =2.53; F{l,78) - .25, p < \}. These results do not support acorrelation between responsibility and guilt and a greaterpreference for hedonic items in forfeiture choices.

The limitations of the present research point out promis-ing areas for further research. One relates to the choice prob-lems that were used. The choice sets in our experimentswere limited to two alternatives. Greater complexity andtask realistn in acquisition and forfeiture choices from a setof more than two alternatives may induce different decisionprocesses that may change the proposed eftect. In addition,our outcome- rather than process-oriented methodologydoes not examine the thoughts that subjects spontaneouslygenerate in the two conditions and that are predicted to me-diate the asymmetry in relative evaluations. Further researchcould examine think-aloud protocols to provide additionalsupport for the existence and effect of differential elabora-tion in acquisition and forteiture choices. Last, it would beinteresting to test whether the preference asymmetry we ob-served is due solely to the intrinsic properties of hedonic andutilitarian goods or whether the effect extends to other prod-uct features becau se of more general differences in the easewith which these can be elaborated on.Theoretical Implications

Tbis fundamental asymmetry in how consumers trade offhedonic and utilitarian product attributes in domains oflosses and gains also sheds light on the discussion of thecauses of loss aversion and the processes hy which it oper-ates (e.g., Haneman n 1991; Sen and Johnson 1997).Although the phenomenon itself is well established, rela-tively little is known about the exact processes that underlieasymmetric valuations of gains and losses. To address thisgap, we need a systematic analysis of key moderators thatdrive differences in reference dependence and loss aversion

across categories of goods and attributes. Such differenceshave been shown, for example, by Hardie, Johnson, andFader (1993), who demonstrate greater loss aversion forproduct quality than for price, and by lrwin (1994), whofinds greater loss aversion for environmental (public) goodstban market {private) goods.Tbe present findings contribute to this discussion in twoways. First, the endowment effect and buyer-seller price

gaps may arise from a differential focus on the hedonic andutilitarian aspects of a traded good if owners/sellers aremore likely than nonowners/buyers to engage in sponta-neous elaboration in determining their evaluations of tbatgood. This has several implications for further research re-lated to loss aversion. For example, we could examine theeffect of asking buyers to imagine the actual experience withthe good to be traded, which should attenuate buyer-sellerprice gaps. Furthemiore, the variation in loss aversion{measured asX )across goods can be examined to determineif tis correlated with the hedonic content of these goods andwith ease of elaboration.Second, we designed E xperiment 3 so that we could com -pare loss-aversion coefficients for hedonic (A.|,) and utilitar-ian Xf) attributes by computing a relative loss-aversion co-efficient Xf,t directly from observed choice shares. Thechoice-based nature of this design enables re.searchers to es-timate relative loss aversion without having to determine thesize of the individual eoeffieients from the usual WTP andWTA measures that previous research has used. To the ex-tent that consumer preferences in markets are revealedthrough choices (i.e., joint evaluations), WTP and WTA(i.e., separate evaluations) potentially introduce a source ofmeasurement error and bias {see Hsee 2000). Further re-search can use the present choice based design to derive po-tentially more valid estimates of relative loss aversionacross attributes and commodity types.Managerial Implications

Managerial implications of the findings are straightfor-ward. At a strategic level, if competing firms are forced tocut existing product attribute or service levels {see Sen andMorwitz 1996), consumers may he more reluctant to acceptcuts on the more hedonic dimensions. In contrast, addingthe same hedonic benefits may have relatively less impacton market share than would adding more utilitarian benefits.Similar implications may hold for bargaining situations thatinvolve trade-offs between hedonic and utilitarian benefits.For example, labor unions may be more likely to rejectmanagement proposals to cut funding for cotnpany-ownedvacation retreats {a hedonic benefit) than to reject proposalsfor a slight increase in the number of working hours (a util-itarian feature) but may value similar improvements inworking hours relatively more than increased funding of va-cation retreats.

Our results also suggest implications for pricing and pro-motion strategies. Marketers ought to be able to charge pre-miums for hedonic goods to which consumers have adaptedin some manner when the consumers are faced with a deci-sion to discontinue consumption. For example, all else be-ing equal, marketers may he able to add a bedonic premiumto the buyout option price at whicb lessees of luxury orsports cars can buy their vehicles at the end of the leaseterm. Alternatively, we suspect that buyout rates are higher


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70 JOURNAL OF MARKETING RESEARCH FEBRUARY 2000for these hedonic cars than for more utilitarian ones, such ascompact cars or minivans. Introductory special offers are of-ten used to acquire new customers. Our results suggest thatacquisition through trial periods and samples may be rela-tively more effective for hedon ic (e.g., cahle television) thanfor utilitarian (e.g., encyclopedias) goods. All else beingequal, this may make low introductory price offers espe-cially attractive for hedonic goods. More generally, our re-sults also indicate that secondhand markets involving pri-vate sellers may be less efficient for hedonic than forutilitarian goods, because owners of hedonic goods may berelatively more reluctant to sell at prices that potential buy-ers are willing to offer.

Asymmetric preferences due to a simple task manipula-tion raise the question of which frame is more appropriatewhen consumers make purchase decisions. From a norma-tive perspective, trade-offs between hedonic and utilitarianalternatives to derive overall evaluations should be made in-dependently of particular reference items, which makes ei-ther frame suspect. Descriptively speaking, the answer tothis question may depend on a consumer's propensity to fo-cus on forgone alternatives. If consumers tend to elaborateon what might have been, choosing the more hedonic optionmay make them happier. However, if out of sight is out ofmind for consumers, the more utilitarian option may be thebetter choice.PPEN IX

We provide examples ofon of the stimuli (apartments) inthe inferior reference item (corresponding to acquisition;upper panel) and superior reference item (corresponding toforfeiture; lower panel) conditions in Experiment 3:Apartments

Imagine that for the past year you have been renting aone bedroom apartment that has the following features: overlooks a large parking lot. is a 45-niinute drive from your place of work.Now you have to move out of this apartment, and youface a decision of renting one of the two apartments de-scribed below. Both apartments have one bedroom and aresimilar in all other respects (for example, monthly rent,safety).

View Distance lo WorkYour presemapartmentApanmentI

Apartnienl [l

Overlooksalarge parkinglot

Breathtaking viewof sunseta ndcity skyline

Overlooks alargeparkinglo t

4.'>-minute driv e

45-minule drive

lO-minuIe drive

ApartmentsImagine that for the past year you have been renting a

one-bedroom apartment that has the following features:has a breathtaking view of the sunset and city skyline.is a lO-minute drive from your place of work.

Now you have to move out of this apartment, and youface a decision of renting one of the two apartments de-scribed below. Both apartments have one bedroom and aresimilar in all other respects (for example, monthly rent,safety).View Distance toWork

Your presentapartment

ApartmentI

Apartment II

Breathtaking viewof sunsetandcity skyline

Brealhtaking viewof sunset andcity skylineOverlooks a largeparking lot

lO-minute drive

45-minute drive

10-minute drive

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