The purpose of this paper is to examine the cross‐cultural generalization of the effect of option choice framing on product option choices and other managerial and psychological variables.
The experiment employs 124 Singaporean and 96 Thai working adults, who add options to a base model or delete options from a full model in a condominium purchase scenario. Hypotheses are derived from the different weights for monetary losses and utility gains from adding options vs utility losses and monetary gains from deleting options.
For both Singaporeans and Thais, compared to additive framing, subtractive framing results in a higher number of options chosen, higher total option prices, higher expected product prices and higher perceived product prestige. For Thais, compared to additive framing, subtractive framing also results in lower perceived decision difficulty and shorter decision time. For Singaporeans, compared to additive framing, subtractive framing results in shorter decision time and higher perceived value.
The option choice task is a scenario, not a real‐life choice task in which participants have to spend real money.
Subtractive option choice framing should be used rather than additive option choice framing. However, in recession time, the use of subtractive framing may backfire because consumers perceive the product as more expensive than its counterpart presented under additive framing, thus lowering their purchase intention of the product. In addition, whenever marketers want consumers to perceive the starting price as low, the price of a base model should be emphasized as opposed to the price of a full model.
This study examines an important issue – whether the superiority of subtractive framing over additive framing reported in past research is valid in other cultures that are very different from American and whether it is valid in another product category. The results qualify past findings that people give more weight to utility losses than monetary losses.
