The psychological underpinnings of relative thinking in price comparisons

This article investigates the psychological underpinnings of relative thinking—the tendency of consumers to consider relative savings, and not just absolute savings, in their decisions to search for a deal or purchase an item. We examine how (i) cognitive load, (ii) the affective-richness of the product, and (iii) the consumer's propensity for intuitive decision-making influence relative thinking. As hypothesized, high cognitive load and affect-rich (vs. affect-poor) products, and individual level preference for intuitive decision-making aggravate this behavior. Our results present clear managerial implications along with developing a better understanding of the behavioral foundations of relative thinking.