For decades, economists have taught that competition between product brands leads to lower prices in the marketplace because consumers generally buy the lowest-priced items. However, researchers from three business schools recently noticed this assumption fell flat when it came to luxury items, like wine and chocolate. Despite an ever-increasing array of brands consumers can choose from at stores, prices on luxury items continue to climb with each new product that comes to market. Researchers say that’s because in the presence of so many options, consumer buying habits change from getting the best price to finding the best quality–and they’re willing to pay more than they should for it.
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Recent research published in the Journal of Consumer Research indicates that online comments do impact buyers’ decisions about which products to purchase. However, the factors that have the most influence are the number of comments and the reader’s approach to reading those comments.

According to Yeosun Yoon, Zeynep Gurhan-Canli and Gulen Sarial-Abi, co-authors of the study, “How individuals make decisions is influenced by their self-regulatory goals. According to regulatory focus theory, promotion-focused individuals are likely to be sensitive to gain-related information that involves the presence or absence of positive outcomes. On the other hand, prevention-focused individuals are likely to be sensitive to loss-related information that involves the presence or absence of negative outcomes.”
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