UC Berkeley

This dissertation documents consumers’ decision-making when they have an opportunity be both maximally selfish and kind toward others. Using Consumer Elective Pricing, we explore how social forces operate in influencing consumers’ decisions. A set of three investigations examines how emotion, perceptions of social norms, and anchoring as judgment heuristics operate in influencing consumers’ decisions. We find that each of the three social forces uniquely shapes consumers’ behavior under elective pricing. Consumers are sensitive to the presence of charitable giving but largely insensitive to the scope of their giving when they pay what they want and a portion of their payment goes to charity (Chapter 2). When paying forward, consumers infer a higher level of kindness in others when they are informed about others’ kind behavior, raising their own payments to match their perceptions of social norms (Chapter 3). Inconsistent with the prior relevant research on anchoring effects, we find that consumers are not significantly influenced by payment anchors unless anchors are hypothetically presented in lab settings, have no actual financial consequences, or have large distributive (we also term subjective) gaps (Chapter 4). In a series of field and lab studies, this set of three investigations sheds light on the psychology that enforces the deviations from the “rational” economic decisions.