The Frightened Partner effect -Why Consumers Sometimes Prefer Dearer Products –

Introduction

In the complex world of consumer behaviour, the preference for more expensive products over cheaper alternatives is a fascinating phenomenon. This preference can be attributed to several psychological, social, and economic factors that influence purchasing decisions. The economics textbook point to a number of factors including

• Perceived Quality and Reliability
• Status and Prestige
• Trust and Brand Loyalty
• Psychological Comfort
• The Role of Marketing
• Economic and environmental effects

I want to add another factor, the frightened partner effect Although only based on a sample of one, conversations with many of my peers  makes me believe the frightened partner effect  has sound empirical support,

The Frightened partner theory in action

I was asked , in this case by a housekeeper (rather than a partner) to buy some aluminium foil and not just aluminium foil, Alfoil specifically. On arriving at the super-market. I found that a 30 M long 30 cm wide Alfoil was $8.50, whereas the Coles brand of the same dimensions was %5.50,  $ 3.00 0r 35% cheaper for what was ostensibly  the same product or at least fulfilled the same function.

A 35 percent saving seem to be too good to miss, even accepting that Alfoil may be thicker and stronger. It was simply going to be used to wrap up leftovers and therefore did not need to be that strong.  Why not get the cheaper product?

While I was engaging in this quick price calculus, another thought struck me. I had specifically been asked  to buy Alfoil from the person who , in comparison to me, was a cooking expert. But  was see acting with the full command of the facts or being swayed by perceived quality and reliability judgements and was she aware of the large price penalty in buying Alfoil?

In economics this was  known as information asymmetry. Had she done the marker research to justify the dearer product or was it just a status and prestige effect, terrified that one of her friends would see a discount priced foil product in her kitchen . She may also have been using the name Alfoil in a generic sense the way vacuum cleaners were often referred to as Hoovers.

Rationally, a 35% discount should be sufficient to compensate for any real or imagined quality differences and so, purchase of the cheaper product seemed justified. But then the voices came into my head

“I specifically asked for Alfoil that other stuff is cheap rubbish”

“Why can’t you just follow a list”

“You always buy the cheap stuff”

It was at this stage that I did some quick arbitrage thinking. A $3 saving was not worth the likely inquisition that would most likely follow. I followed the frightened partner effect and bought the dearer product as instructed

Conclusion

In conclusion, empirical research leads me to believe that the frightened partner effect is real and impacts on consumption decisions. It has elements of perceived quality and prestige, trust and brand loyalty and psychological comfort, but it goes beyond that. My decision was not based on economic principles but more so on a desire for a quiet life and not to be seen as cheap. These feelings made me act, in an economic sense, irrationally.

I think this type of effect is widespread in commercial decisions Consumers base their purchases not on the accepted economic principles listed above but from fear of how others will interpret the reasoning behind the purchase, often in an unflattering manner.