Utility blindness: Why do we fall for deals?

Abstract

ABSTRACT Utility blindness occurs under limited information processing when consumers base their purchase decisions solely on transaction utility (gains from the deal) rather than on total utility. When the deal is attractive enough, consumers will buy a product even though the total utility is little or negative; on the other hand, an unattractive deal might decrease consumers' purchase likelihood even when the total utility is unaffected by the promotion. In this paper, three experiments provide evidence for the existence of utility blindness and demonstrate that information processing limitation is the underlying process. Transaction utility salience and cognitive load are identified as the moderating factors. Theoretical contributions, managerial implications, limitations, and future areas of the current research are also discussed. Copyright © 2013 John Wiley & Sons, Ltd.

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