TWO ESSAYS ON THE EFFECT OF POWER DISTANCE BELIEF ON CONSUMERS’ DECISION MAKING IN THE RETAILING CONTEXT

Abstract

Power distance belief (PDB) refers to the extent to which individuals expect and accept inequality and hierarchy. Recently studies have revealed that PDB impacts numerous aspects of consumer-related behaviors, such as impulsive buying, price-quality judgment, status consumption, and charitable behaviors. This dissertation aims to advance our knowledge of the effect of PDB on various consumer behaviors in the context of retailing. Specifically, Essay 1 explores the relationship between PDB and variety-seeking behavior. Using six studies with different operationalizations of PDB and variety seeking, I found the consistent result that high PDB consumers have a higher preference for the variety seeking than low PDB consumers. I argue that this difference is driven by high PDB consumers’ propensity toward the boredom. Further, I found that externally inducing monotony or stimulation acted as boundary conditions to this effect. Essay 2 investigates the effect of PDB on discount evaluation. I propose that activating high-PDB among consumers enhances the appeal of discounts, and this leads to a greater preference for the discounted product. Further, I predict and show that categorization tendency and perceived discount depth mediate the relationship between PDB and discount preference. Further, I show that either externally removing categorization tendency or altering discount magnitude would attenuate the effect of PDB on discount preference. In summary, the two essays together contribute to the literature on pricing strategy and product assortment management in the field of retailing.