Suppose 1,000 students were split into two groups of 500.Both groups were first presented with an image of a new high-end pair of jeans produced by Tommy Hilfiger,a clothing company.
The first group was given the following statement and then asked the following question: "The normal retail price of these jeans is $100.Would you be willing to pay $75 for them?"
The second group was given the following statement and then asked the following question: "The normal retail price of these jeans is $250.Would you be willing to pay $75 for them?"
Suppose that 24% of the students in the first group answered yes and that 73% of the students in the second group answered yes.It is likely that more students in the second group were willing to pay $75 for the pair of jeans because they were told the normal price was much higher.This is an example of a ________ effect in decision-making.
A) clothing
B) marketing
C) utilitarian
D) framing
E) psychosomatic

Question

Quizplus · Accepted Answer

This is an example of framing effect in decision-making, where the way information is presented (i.e., framed) influences the decision-making process. In this case, the second group was presented with a higher reference price, which made the $75 price seem like a better deal, leading to a higher percentage of students willing to pay for the jeans.

Suppose 1,000 Students Were Split into Two Groups of 500