Consumers Reactions to Deceptive Practices in the Marketplace.

n recent years there has been a surge of changes in the marketplace. These changes commonly entail deceptive firm practices that aim to preserve or increase firm profits at the expense of consumers. For instance, one such practice is shrinkflation, which involves decreasing the size of the product without changing its price. Another practice is skimpflation, which involves decreasing the quality of the product without changing the products size or price. Importantly, there is little academic research that has examined these deceptive practices and there are critical questions that still need to be answered. This project seeks to expand the corpus of knowledge investigating consumers judgments and reactions to deceptive practices in the marketplace. While recent literature has investigated consumers response to some of these practices, there are still many lingering questions that this research seeks to address. This project seeks to (1) investigate peoples judgments of fairness about a wide range of contemporary marketplace practices (e.g., skimpflation, shrinkflation, recurring price increases, sludges, etc.), (2) assess how consumers react to these practices, for instance by adjusting their purchase behavior, upon noticing them, and (3) establish critical conditions, or moderators, under which these practices can become more permissible. This project consists of four sub-projects. Sub-project 1 will examine how consumers perceive skimpflation in comparison to other cost-management strategies, such as reducing product size or increasing prices. It will uncover whether skimpflation is perceived to be more unfair than raising prices or downsizing products, as well as whether consumers intention to purchase the product decreases more when its quality decreases (vs. when its size decreases or when its price decreases). Sub-project 2 will distinguish between two forms of shrinkflation: (1) reducing the net weight of the product while also reducing the size of the packaging, and (2) reducing the net weight of the product without changing the products packaging. This sub-project will seek to examine whether consumers view these two forms of shrinkflation differently. Specifically, it will test whether the second form of shrinkflation (i.e., reducing net weight without changing packaging) is more aversive than the first form of shrinkflation (i.e., reducing net weight while reducing size of packaging). Sub-project 3 will focus on consumers perceptions of price changes. Specifically, it will investigate whether consumers believe that a given price change is more or less fair depending on the frequency of the change (e.g., comparing price increases that occur in a single large step, such as a single price increase of 10, to price increases that take place over multiple smaller steps, such as four consecutive price increases of 2.5 each). Sub-project 4 will focus on deceptive designs and dark nudges, which are forms of choice architecture that firms use to make consumers lives more difficult, such as by making ancelling subscriptions more difficult, or by using defaults to sway consumers into making repeat purchases. Sub-project 4 will investigate consumers beliefs about such practices. This research seeks to advance scientific literature on these topics, but also to equip
policy makers with tools and knowledge for combating deception in the marketplace to protect consumers interests.