Integrated Process Model of Stereotype Threat Effects on Product Price and Value Judgments

Pricing literature has offered conflicting evidences in the way working memory resources impact consumers' price and value perceptions. This research aims to clarify the ambiguity by examining the effect of a situational factor (e.g., stereotype threat) that could impact the influence of working memory resources on price and value perceptions. This research finds that if stereotype threat (i.e., a situational predicament caused by the notion that one is at risk of confirming negative stereotypes about one's group) temporarily depletes working memory resources, it would also affect product price and value perceptions. Specifically, this research finds that stereotype threat temporarily lowers working memory resources, which increases targeted individuals' tendency to engage in heuristic information processing. Heuristic processing increases targeted individuals' tendency to rely more on a price-quality rather than price-sacrifice relationship to infer product value. This research further finds that a store environment would minimize the impact of stereotype threat on working memory resources of stereotype-threatened individuals and subsequently on price and value perceptions. This research also employs EEG (i.e., electroencephalogram) neuroimaging technique to provide further evidence that the observed effects were indeed due to impairment of working memory resources. This research contributes to pricing literature by identifying situational and environmental factors that could influence price perceptions and provides practical implications to modify store environment.Ph.D., Business Administration -- Drexel University, 201