تجربه هزینه ها و منافع از تراکنش وام: نقش ارتباط های هزینه ـ فایده

Financial transactions involve costs and benefits. This also holds for loan transactions where the loan itself constitutes the main cost and the loan-financed possession constitutes the main benefit. This paper aims to investigate how the way consumers mentally associate costs and benefits influences their evaluation of these costs and benefits. In line with previous research we distinguish between strength and direction (costs bring to mind benefits or vice versa) of cost–benefit-associations. We posit that the occurrence of cost–benefit-associations constitutes a meta-cognitive experience which may influence consumer judgments in different ways. It may influence the evaluation of the base cognition and it may influence the evaluation of associated cognition. Whereas existing theorizing points to an effect on the former, an effect on the latter is equally conceivable. A field study with actual credit users and an experiment identify relations other than those previously assumed. If benefits elicit thoughts of costs, the perceived cost (here: loan burden) increase. If costs elicit thoughts of benefits, no effects on the transaction experience are observed. Implications for the theoretical analyses of cost–benefit-associations and for future research aiming to alleviate perceived loan burden are derived.

Purchases are two-sided phenomena. On the one hand they involve the benefits of the purchased goods; on the other hand they also involve costs. People can be aware of these “two sides of the same coin” or they can forget about costs when thinking of the benefits and vice versa. Often people will see both sides and establish cognitive links between costs and benefits. For example, research on mental accounting shows that people frequently keep track of and compare costs and benefits of a purchase in order to evaluate whether a transaction is favourable or not (e.g., Hirst et al., 1994 and Thaler, 1985). However, consumers do not always establish strong and reciprocal cost–benefit-associations. For example, payment by credit card may obscure the cognitive link between costs and benefits, or people may be motivated to forget about the costs of a transaction (Prelec and Loewenstein, 1998, Prelec and Simester, 2001 and Shafir and Thaler, 2006). Differences in mental cost–benefit-associations (CBAs) are likely to be consequential. How people experience a purchase or behave towards a product and its seller may in part depend on how they associate costs and benefits (Kamleitner and Hoelzl, 2009, Prelec and Loewenstein, 1998 and Soman and Gourville, 2001). For example, a person who consumes the benefits of a product without thinking of its costs may enjoy the product more and feel different about the costs than a person who is reminded of the costs when enjoying the benefits of a product. Considering the likely impact of CBAs on consumer’s transaction experiences and the likely influence of business practice (e.g., via bundling, payment schedules, advertising) on the degree to which CBAs are established, CBAs are a relevant construct for scholars and practitioners. This paper advances current knowledge by viewing CBAs as constituting a meta-cognitive experience. By applying a meta-cognitive perspective existing theorizing on the effect of CBAs is reconceptualised and extended, and two different ways in which CBAs may influence consumer judgment are outlined. We assess the actual ways in which CBAs influence consumer evaluations in the context of an important financial transaction in a consumer’s life: a loan-financed acquisition. A field study and an experiment show a very selective influence of CBAs on consumer evaluations. This selective influence only partially confirms the influences hypothesized in previous theorizing.

To interpret our findings it is helpful to split these into three main sub-findings: (a) the differential effectiveness of the different directions of association, (b) the consistent main effect of the benefit-to-cost association on the cost perception, (c) the differential emergence of an effect on the benefit perception. We discuss these in turn. The first main finding is that of a null effect of the cost-to-benefit association. To interpret this effect it is necessary to preclude that it might be due to measurement artifacts. Ceiling or floor effects in the dependent variables as well as lack of variation in the independent variables may suppress actual effects. The data at hand do not indicate any of these effects. The observed null effect was robust across samples, designs, and measures, ceiling effects can be precluded because the dependent variables were influenced by the other direction of association, and the observed variation in CBA-structure in the field study is a noteworthy finding in itself. So why did the benefit-to-cost association but not the cost-to-benefit association influence consumer experiences? We suggest that the information value ascribed to the meta-cognitive experience of an association differs between the two directions. Throughout our studies loans had been taken out for objects (car, flat, etc.) that are used on a daily basis. Thoughts of the object (here: benefits) hence occur often and are – even if instigated by prior thoughts of costs – not likely to draw pronounced meta-cognitive attention. Moreover, costs and in particular a specific loan are likely to be associated with a limited amount of other constructs (Anderson & Bower, 1973). Benefits are likely the dominant association. Taken together, consumers are unlikely to pay much attention or ascribe additional information value to the experience of cost-to-benefit associations. The case of benefit-to-cost associations is very different from that. Objects such as cars are likely to be at the center of a tightly woven and extensive associative network. Cost associations constitute only one of many associations. If thoughts of benefits bring to mind thoughts of costs this is hence likely to draw attention and be subject to meta-cognitive interpretation which in turn influences judgment. Indeed we find a consistent effect of benefit-to-cost associations on judgment. The direction such an effect takes rests upon a person’s subjective interpretation of why a meta-cognitive experience occurs (e.g., Brinol et al., 2006 and Labroo et al., 2009). Here we focused in particular on whether consumers believe that the association says more about the base cognition or the associated cognition. The evidence consistently favours an effect on the associated cognition. It seems that consumers believe that if a benefit brings to mind the loan this says more about the aversiveness of the loan rather than the benefit. It would be interesting to gain a deeper understanding of the underlying lay theories in future research, for example, by using thought protocols. Although the main effect of benefit-to-cost associations was on the cost perception, in the field study an additional effect on the utility derived from the loan-financed benefit emerged for mortgage users. An interesting question in this context asks why no such effect was observed in Study 2. There are two likely answers that diminish initial inconsistencies. First, in Study 1 the effect of utility only emerged for mortgage holders, but not for personal loan users. Study 2 looked at personal loans and the observed null effect is hence consistent with regard to the actual situation studied. Second, Study 1 assessed hedonic and utilitarian utility with two separate items and found an effect for hedonic utility only which was furthermore restricted to the sample of mortgage holders. Study 2 assessed utility with one encompassing item that corresponded to a composite of utilitarian and hedonic utility and found no effect of CBAs on utility. It is impossible to determine whether the observed null-effect was due to the personal loan rather than mortgage scenario or to the change in measurement. Both aspects predict that at best a marginal effect would have been observed. On a more general level these observations lead to interesting questions for future research. Based on the differential effects observed in Study 1 it seems possible that attenuation of consumption pleasure depends on characteristics of the product or the transaction. For example, it could be that the considerably longer duration of a mortgage might lie behind the observed differential findings. Also, it seems that the effect of CBAs may restrict itself to hedonic utility measures such as the consumption pleasure discussed by Prelec and Loewenstein (1998). Future research that directly taps into lay theories is needed to chart the many potential boundary conditions to the effect of CBAs.