A Critical Analysis of Negativity Bias in Consumer Price Response

This report critically appraises a research article examining the negativity bias in consumer price response to ethical information. The analysis includes a review of the research objectives, methodology, and conclusions, alongside an assessment of the article's fitness within existing literature. The report evaluates the methodology, highlighting the use of a deductive approach with questionnaires and statistical analysis to quantify consumers' willingness to pay. It also examines the study's limitations, such as the lack of brand influence consideration and limited demographic factors, while acknowledging the appropriate selection of samples and data analysis processes. The conclusion section synthesizes the findings, offering insights into the impact of corporate ethical performance on consumer behavior, the importance of transparency, and the influence of negative stimuli on price expectations. The report emphasizes the need for clear research objectives and a comprehensive approach to ethical considerations to enhance the study's validity and impact. The report is contributed by a student to be published on the website Desklib. Desklib is a platform which provides all the necessary AI based study tools for students.

Negativity bias in consumer price response to ethical information

TABLE OF CONTENTS
INTRODUCTION...........................................................................................................................1
TASK 1............................................................................................................................................1
(a) Critically appraisal of research objectives and paper fitness into existing literatures............1
(b) Critical appraisal of the research methodology and methods used by authors......................3
(c) Critical appraisal of the research conclusions and its academic understanding in this area of
research 5
(d) A critical evaluation of the limitations of article and suggestion on further work................6
CONCLUSION................................................................................................................................8
REFERENCES................................................................................................................................9

INTRODUCTION
The rationale behind conducting this article is to analyse the article on “Negativity bias in
consumer price response to ethical information”, on the basis of literature review, objective, data
analysis, and conclusion and suggestion sections. In this regard, different studies of authors were
critically compared that can be beneficial for researcher in term of increasing knowledge about
critical analysis of articles in a proper manner. For this purpose, consumer’s willingness to pay
high for ethically produced goods is increased continuously statement was considered.
TASK 1
(a) Critically appraisal of research objectives and paper fitness into existing literatures
From the critical comparison of studies done by different researcher’s who have done
studies on topics such as customer satisfaction, ethical leadership effectiveness, workplace
culture etc, it is identified that there is need to formulate objectives for the investigation to be
made. The suitability of this subject can be identified in term of selection of title “Negativity bias
in consumer price response to ethical information”, which clearly indicates the direct effect on
consumer’s willingness to pay. From the study, it is clear that consumer’s willingness to pay
high for ethically produced goods is increased continuously (ELS Effective Learning Service,
n.d.). In introduction section of article, researcher clearly describes the research questions
including impact of corporate ethical performance (CEP) on the customer’s willingness to pay
(WTP) and price responses to CEP. However, as evidenced from searching of data on similar
topic, it has been found that there has not met any effective research regarding present study.
Hence, present articles did not provide detail about research objectives which proper matches
with title of the study. Nonetheless, by providing clear objectives in bullet points, scholar can
magnetize the attention of readers. Besides that, present paper was prepared to understand the
biasness of consumers toward price expectation and ethical product offer by firm (Hewitt, 2009).
In addition, for attaining research objectives, researcher was conducted literature review
and critical comparison of different author’s views was done. In order to attain objective, scholar
has prepared hypothesis which helps in identifying relationship between consumers WTP and
ethical information (EI) provided by client to them within stipulated time. From the article, it is
clear that very few studies have been conducted related to understand the negative stimuli and
link between WTP responses and PE response (David and Andrew, 2011).
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Fitness of this article into existing literatures can be seen in form of well prepared
abstract and clearly interprets aim of study which is related to analyze a consumer individual bias
that also helps researcher in attaining research objectives of the present study in a significant
manner. Despite of that, present study which was made on ethical performance of organization
shows clearly defined important implications that can be beneficial for organization in term of
meeting expectations of customers in an appropriate way (Guo, 2014).
From the findings of the study, it is clear that supports needed by the businesses during
different stages are required for enterprise in term of better implementation of organizational
processes. From the critical review of literature and different studies done by previous scholars,
it is clear that in modern era, it is required for companies to follow corporate ethical performance
in order to increase transparency in business and creates positive image of firm in the canvas of
the minds of customers (Hall and Citrenbaum, 2010).
After reviewing different literatures, it can be said that present article into the existing
literatures on the given subject. As in the literature review there has been quoted opinion and
views of different authors on similar subject. This provided me in-depth knowledge about the
related study made with respect to ethical leadership. Research own findings and other researcher
findings indicates that WTP highly influences the services of organizations in digital arena.
Many authors including Kleine&Von Hauff (2009), Svensson and et.al. (2010) and Timonen and
Luoma-aho (2010) findings related to ethical activities of companies that can highly influenced
business performance either in term of increasing turn-over and decreasing costs were included.
On the other hand, Paul and their colleagues (1997) indicate that consumers have positive
attitude toward CEP. Meijer and schuyat (2005) criticized the fact provided by Paul and their
colleagues. As per their findings, negative bias can affect willingness of customer pay. By
considering these studies as base, Moosayer (2012) were conducted his research. In this regard,
different questions were generated by investors regarding to know the impact of customers
toward WTP and shows the negative biasness of consumers related to price responses to CEP.
Review of literature conducted related to present topic clearly indicates that changes come in
consumers WTP and price expectations (PE) will occur in form of negativity bias as a ratio (Han,
2015).
Along with this, researcher clearly defined different views of authors related to consumer
response to ethicality production, and consumer biasness in response to negative stimuli which
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are enough to attain objectives of the present article in an appropriate manner (Cantallops and
Salvi, 2014). This is made by using sources which are available from online sources. On the
other hand, present article clearly discusses the behavioural pricing research theory related to
identify the impact of negative and positive information on attitudes of customers. Hence, it can
be said that present article is fit in term of existing research conducted by previous researchers. It
covers all information about consumer’s attitudes, negative market stimuli, consumer biasness
and their view related to ethicality of production. All the information taken by researcher clearly
is appropriate in term of attaining objectives and prove hypothesis in a significant manner
(Zhang and et.al.,2014). However, researcher should provide clear information about objectives
separately in introduction part so that reader can easily understand the purpose of research
properly.
(b) Critical appraisal of the research methodology and methods used by authors
Overview of methodology: Researcher was used deductive approach in which hypothesis was
framed and test by applying statistical method in a proper way. I In this regard, questionnaire
was framed and along with this, picture of shoe and a mobile phone with description were
provided to client. The main purpose behind taking this approach was to quantify their WTP and
PE. Besides that, researcher had maintained reliability and validity in the entire research through
collecting real information from the websites of local retailers (Floyd and et.al., 2014). Sample
size which was taken into study was 379. Consumers were taken as respondents in the present
study. Measure which has been taken as a part of study were measured as absolute price figures
which was there is Euros. Participants have been asked about the highest cost which was willing
to be paid by customers.
Justification behind choosing methodology: For the purpose of data collection, researcher was
used two approaches and these techniques are better in term of understanding the impact of
social EI toward athletic shoes and negative environmental EI about the mobile production. In
this regard, researcher clearly identified positive and negative stimulus on two sets A and B.
Investigator prepared hypothesis for two shopping goods including athletic shoes and mobile
phone. Besides that, researcher asked information twice regarding before and after exposures to
stimulus (Cantallops and Salvi, 2014). For evaluating relation between these two, each
respondent was provided only one stimulus per product. In this section, all information related to
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sampling, analyzing in term of qualitative and quantitative research was clearly defined in the
precise way.
Critical review on article: In this article, researcher was not focused brand influence. But this
information can play an important role in term of measuring perception of individual customers
towards products and services offer by firm. In addition, researcher clearly mentioned
information about number of respondents and population from which data was collected. Besides
that, purpose of collecting sample size and reason were clearly defined (Machin and Mayr,
2012). Appropriate selection and categorization of samples have been done into two parts
including set A and set B. Nonetheless, researcher was taken only age factor as demographic
factor and it is not enough to present the attitudes and perceptions of consumers towards services
provided by company to them. The researcher mainly emphasizes on primary data collection
methods like sources, respondents and sample size. But it did not provide clear information about
sources from where secondary data was gathered (Tan, 2009).
Research methods used in the article can be assessed in term of different criteria’s that can be
described as follow.
 Suitability of research design: From reviewing the information provided in article, it is
clear that investigator was provided clear information about research process from data
collection to analyse in a significant manner. Sample size, population and number of
respondents were chosen for study appropriate in term of attaining research objectives in
a significant manner (Taylor, 2007).
 Data collection and analysis processes followed were appropriate. It is because of the
rationale which was stated behind the selection of every research tool. In order to collect
information about respondents and their views about products and services. However,
researcher should provide information about secondary sources like books, journals and
online articles from where secondary data was collected (Wu-peng, 2014).
 Appropriateness of chosen research methodologies: It can be measured in form of
providing trustworthy conclusions, suitable to answer the research question and
information about the independent and dependent variable used in analysis. On the basis
of these criteria’s, it can be said that sample size, proper selection of respondents and
applying statistical test to prove hypothesis were able to give the answer of article
questions including impact of CEP on consumers WTP (Backett-Milburn, 2001). These
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are statistical tools which are applied in the research study in order to test the data
collected and conclusion made out. However, during applying t-test, researcher was not
provided detail about independent and dependent variable on which test was applied and
not proper reason was given behind employing this test.
 Analysis of methods and results: In order to test hypothesis, investigator was applied an
inferential statistical test or t-test. By applying this test, author clearly mentioned the
individual negativity bias. In addition, value of t-test clearly indicates that both samples
doe not differ significantly (Birley, 2003). In order to increase efficiency of outcome,
secondary was also collected from authentic sources. In this regard, relative price figures
were used to avoid magnitude effect in bias evaluation. Result of study was clearly
described with help of taking table (Einhäupl, 2007). The example has been shown in the
illustration below. Hence, it can be said that analysis done by scholar is good in term of
describing result and attaining objectives of study in a proper manner.
 Ethical consideration: Researcher did not clearly mention the detail about ethical
consideration which he was considered while conducting the study. For example,
researcher failed to provide information about availability and prior permission from
respondents related to data collection process in a proper way (Coughlin and Molyneux,
2003). The researcher must provide clear information about issues of confidentiality and
anonymity that can affect result of study.
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(c) Critical appraisal of the research conclusions and its academic understanding in this area of
research
Critical appraisal of the research conclusion is a systematic way which supports in
identifying the strengths and weaknesses of the whole investigation. In similar regards to the
present study, which was conducted on negative bias in consumer price response to ethical
information, the significance lies in knowing about the assessment of whole study. The
conclusion provides an evaluation of the research undertaken. In academic understanding in the
area of present research, consumer response to EI has been analyzed (Dorssemont, 2004). For
this study, the researchers mentioned discussion at the end of the article. As evaluated from the
discussion that research has been successful in assessing the negative bias. It has been found that
consumers overestimate the negative responses to bad behavior.
According to the discussion presented by the researchers, CDT has been applied to know
the aspect of reference system on consumer price. In the same vein, the investigators have
strongly supported it with the assistance of PRQi as a tool to measure negative biasness. This
tool has been aptly chosen for measuring the perception of consumer's price and consumer's
WTP. But, as analyzed from the discussion section of the article that this tool has certain
limitation that may have acted as hindrance in the current research study. Through applicability
of tool such as CDT it has become possible to gain knowledge regarding the perception of
consumer price along WTP which is beneficial for accomplishing overall aim of the present
study. However, PRQi proved successful but as stated in the words of Bang et.al., (2000), Likert
type measure can also be applied. This would have provided a new dimension which provides
multiple choice alternatives to different participants (Einhäupl, 2007).
Along with this, the study shows that consumers are willing to pay more for the products
which possess ethical product features. It is therefore, analyzed that overall objective of
researcher study made was fulfilled (Holmes, 2013). However, it could have been more effective
if selection of respondents took were evaluated on the ground of different buying behavior of
customers. It has also been identified that customers who were taken as a part of study took had
given socially desirable answers. It, therefore, proved that this research had not completely
considered the points such as firm behavior and other external strategic aspects. Therefore,
selection of respondents is a significant aspect that affects the overall research study.
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Moreover, in consideration to the present research study conducted, it is shown that
proper perception based on stimulus is very crucial part of present research study. However,
according to the discussion provided at the end of this articles states that presented approach
followed conducted evaluation of PE and WTP twice. However, deviation was observed when
respondents were not found effective on single notion (Holmes, 2013). Therefore, it is
recommendable that confounding information should not be used. As it may leads to adverse
impact on the achievement of overall research objective.
In the end, it has been critically analyzed that conclusion has great significance which
provides crux for the overall research being undertaken. This research proved worthwhile as
despite certain limitation, it proved successful in meeting the research objectives. In a streamline
of above identified gap or weaknesses to the current article, there is one more aspect which need
to be effectively worked upon (Khine, 2014). In light of suitable approaches and research
methodology applied to the current study which enhanced reliability of the entire research. Apart
from this the methodological tools were undertaken after considering the nature of the study.
Through this expected findings have been gained regarding the reason due to which consumers
prefer to pay high amount while purchasing ethical goods. All the discussion which summaries
the whole investigation has been made (Birley, 2003). But, it would be more effective and
appropriate if suitably presented under the head conclusion. The significance of conclusion in the
research study is to sum up the relevant and interesting facets of the research. However, the
article ended with discussion that shows proper analysis and evaluation of EI with respect to
willingness to reward good CEP. However, a significance of conclusion is a limitation factor to
the present study. The overall article has supported in obtaining regarding critical analysis of
different articles. Further, it supported in knowing what are the main reasons due to which
consumers prefer to pay high amount for ethically produced goods. So the overall learning
obtained was beneficial for companies who are indulged into practices of producing ethical
commodities.
(d) A critical evaluation of the limitations of article and suggestion on further work
The present article failed to provide information about major limitations which researcher
was faced while conducting research. Without clearly emphasizes on research limitations like
cost and time. Costs acts as a limitation for the study as there are a number of activities which are
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to be accomplished to conduct the research. But, there are limited finances available. Similarly, it
requires time to carry out collection of data and its interpretation and analysis. However, the
researcher had limited time available to conduct the whole research. Hence, time was a limitation
for the researcher. Investigator would unable to attain research objectives in a significant
manner. According to the current study made by researchers, it has been analyzed that consumers
are interested to pay more for goods which possess ethical features. In fair regards, efforts have
been made in understanding the views of the companies and their perception. Generally, they are
not willing to sell unethical products (Einhäupl, 2007). It is analyzed from the application of
research methodology which has been applied that respondents or consumers carries over-react
attitude with respect to negative ethical product features. However, consumers are suggestible to
have broader perception while making purchase. After analyzing the crux from the methodology
section of the research that respondents does not lay stable to overall ethicality of the corporate
in consideration to corporation's product or services.
It has been critically analyzed that present research was successful in attempting the new
horizons for research being undertaken. However, like every other study, the present research
paper also has various limitations. It is important to reflect upon the limitations of the study. As
analyzed from the present research paper that PRQ took age and gender as two main
determinants in study. However, the study would have been more effective of other factors such
as, consumer's price, perception, etc would have been used. This would have supported in
strengthening the current results in more appropriate way. In a streamline, as analyzed that
behavior has been a major determinant that enables the effective direction to meet the objective
of study. It has been found somewhat deviating. Therefore, further research is recommendable to
make the study more strengthening (Beckett-Milburn, 2001). However, it is suggestible on
account of addressing some more ways that may act as an assistance in knowing about the
consumer's negativity bias. By considering other factors, researcher would be able to able to
conduct future research in a significant manner. Excessively narrow subject focus: Investigator fails to provide detail about different
types of risks like personal, social and economic that can influence buying behaviour of
customers. From the result and objectives framed by investigator, it is clear that the tight
concentration on purely consumer willingness to pay more for ethical product features
may unnecessary result narrow.
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 Clear description of future implication: Investigator provided adequate information
about future stream of research. By evaluating negatively bias and validate the suggested
measure, researcher can conduct research in future (MacDonald and Feifel, 2014). In this
regard, a comparison of PRQ across different stimuli can be done. In addition, scholar
can include gender, income and other demographic factors in study in order to better
understand relationship between consumer context and attitudes. Usefulness of suggest measures: On the basis of the overall result, it can be said that
suggested measure will be beneficial for researcher own self, society, students and other
investigators to better understand the concept of consumers negatively bias and drivers
including price, product and perceptions (Hewitt, 2009).
 Challenge to a statement: In the present article, researcher main emphasizes on price
factors and integrate it with willing to pay of customers for ethical products. But
investigator did not consider other factors including cultural & societal elements,
personal factors and psychological factors that can play an important role in term of
identifying relationship between ethical information provide by firm and customer
willingness (ELS Effective Learning Service, n.d.). In this regard, further research can be
carried out in which those factors, that identify relationship between ethical information
and customer willingness, can be identified and further explored.
CONCLUSION
On the basis of critical review of present article, it is clear that in term of providing
information about data collection, sampling, literature review and introduction of topic, present
study is appropriate. However, by improving study and changes done in article, researcher will
be able to increase scope of research in a significant manner. Besides that, it is found that
analysis done by scholar is good in term of describing result and attaining objectives of study
effectively.
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