Friday, March 18, 2011

INSEAD Working Paper 2011/30/MKT

The literature on consumer self-control emphasizes that temptation is costly and focuses on the costs of resisting temptation. We propose that temptation can entail not only costs but also benefits. These arise from self-signaling effects of how consumers handle tempting choice options. Succumbing to temptation is a (costly) self-signal of weak willpower, whereas resisting temptation is a (beneficial) self-signal of strong willpower. In a series of five experiments, we demonstrate that these self-signaling costs and benefits of temptation depend not only on the chosen item but also on the temptation from the other options in the choice set. We discuss theoretical implications of our findings for research on impulsive choice and self-control and on self-signaling and managerial implications for pricing and assortment strategies.