TAKING THE PERSPECTIVE OF A SELLER AND A BUYER: IMPLICATIONS FOR PRICE ELICITATION AND PRICE FRAMING

This dissertation consists of two essays which investigate how assuming the role of a seller or a buyer affects valuations in a price elicitation task (essay I) and how different presentations of an equivalent price affect evaluations when a consumer plays the dual roles of a buyer and a seller in transactions involving trade-ins (essay II). Sellers’ willingness to accept (WTA) to give up a good is typically higher than buyers' willingness to pay (WTP) to obtain the good. Essay I proposes that valuation processes of sellers and buyers are guided by a motivational orientation of “getting the best.” For a seller (buyer) indicating WTA (WTP), getting the best implies receiving as much as possible to give up a specific good (giving up as little as possible to get the specific good). Results of six studies suggest that the WTA-WTP elicitation task activates different directional goals, leading to the WTA-WTP disparity. The different directional goals lead sellers and buyers to focus on different aspects and bias their cognitive reasoning and interpretation of information. By connecting the valuation process to the general motivation of getting the best, this research provides a unifying framework to explain the disparate interpretations of the WTA-WTP disparity. Many new purchases and replacement decisions involve consumers’ trading in their old products. In such transactions, the overall exchange may be priced either as separate transactions (partitioned) with price tags for the payment and the receipt or as a single net price (consolidated) which takes into account the value of the trade-in. Essay II examines whether consumers prefer a partitioned price versus a consolidated price presentation. The findings suggest that when consumers are trading in a product which has a low value relative to the price of a new product, they prefer a consolidated price. In contrast, when trading in a product which has high value, they prefer a partitioned price. The results suggest that consumers use the price of the new product as an anchor to evaluate the trade-in value, and the perception of the trade-in value influences the overall evaluation especially when the transaction is partitioned.

Using Quantitative Methods to Explore Political Leverage, Trade Policy, and Food Security: A Case Study of the Middle East

This dissertation explores why some states consistently secure food imports at prices higher than the world market price, thereby exacerbating food insecurity domestically. I challenge the idea that free market economics alone can explain these trade behaviors, and instead argue that states take into account political considerations when engaging in food trade that results in inefficient trade. In particular, states that are dependent on imports of staple food products, like cereals, are wary of the potential strategic value of these goods to exporters. I argue that this consideration, combined with the importing state’s ability to mitigate that risk through its own forms of political or economic leverage, will shape the behavior of the importing state and contribute to its potential for food security. In addition to cross-national analyses, I use case studies of the Gulf Cooperation Council states and Jordan to demonstrate how the political tools available to these importers affect their food security. The results of my analyses suggest that when import dependent states have access to forms of political leverage, they are more likely to trade efficiently, thereby increasing their potential for food security.