The Comparative Mindset and Managerial Decision Making: Theory Extensions and Boundary Conditions

Previous research on the comparative mindset effect suggests that consumer purchases often involve three sequential steps (Xu and Wyer 2007; 2008). First, they decide whether-to-choose, then they decide which-to-choose, and finally, they implement the purchase. This sequence of steps also occurs in many managerial decisions involving company purchase of products or services as well as in decisions to spend on advertising or strategic initiatives. Extending previous framework in consumer research, we suggest that after making whether-to-choose and which-to-choose decisions, managers often need to decide how much money to spend (i.e., deciding spending level). Because these steps are often pursued sequentially, activating a comparative mindset, which disposes managers to engage in the which-to-choose stage without first considering whether-to-choose, could not only increase managers’ choice likelihood (H1) but also elevate their spending levels (H3). Moreover, this effect is mediated by reduced weighting of negative product information at the decision stage (H2).