Drift Diffusion modelling reveals decision mechanisms underlying consumers' evaluation of prices.

Abstract

Little is known about how price evaluation processes unfold. In the current study we explored if reaction times (RTs) can be used to study price evaluations. Additionally, we explored to what extent drift diffusion models (DDMs) are suitable to decompose the different aspects that underlay this decision processes. In a behavioral experiment, participants were asked to evaluate prices as fast as possible as ‘cheap’ or ‘expensive’. We expected that the time needed to evaluate prices would vary in accordance with a price manipulation that was used, and that RTs therefore could be interpreted a proxy of decision difficulty. Analysis of the behavioral data provided evidence for this hypothesis: very cheap and very expensive prices were evaluated faster compared to ambiguous prices. Then, drift diffusion models (DDMs) were used to decompose the different aspect of this decision process, with the goal to obtain a more fine-grained understanding of how the effect in RT data emerged. Results showed that the drift rate of the model was modulated by the price manipulation. Whereas there was no significant effect of the price manipulation on the non-decision time and the starting point parameter. We then contrasted the findings of the RT analysis with the results of the DDMs and outlined what the added value of DDMs is within this context.