Beating the Market: Competitive Mindset and the Allure of Unintended Value

Consumers often encounter marketing offers that can potentially be construed as valuable opportunities, such as products on sale, loyalty programs, rebate offers, and various promotions. However, the mere fact that an offer is presented or framed as a bargain is often not sufficient to generate consumers’ subjective belief that the offer actually represents superior value for them. While a great deal of research has examined factors that influence value assessment, the factors that produce subjective perceptions of bargain have remained rather elusive. We propose that one important determinant of deal perception is the degree to which an offer appears more valuable than presumably intended by the marketer. In particular, consumers’ belief that the marketer has not fully factored-in their willingness-to-pay or the utility they derive from the promoted product tends to create the (mis) perception of unintended consumer surplus; this, in turn, enhances the likelihood that the offer will be seen as valuable. We further propose that the tendency to act on such perceived bargains reflects in large part a competitive mindset where consumers are driven by a desire to outsmart the market and obtain a better value than intended by the marketer (Ratner and Miller 2001; Wright 1986).