Promotion framing effects on the purchase of hedonic-utilitarian bundles: ERPs evidence of the moderating role of income source

Prior studies suggest that people are susceptible to the promotion framing effect. Yet it's still unknown if income source moderates the effect of promotion frame on consumer decision-making and the underlying neural responses. The current study applied the event-related potentials (ERPs) approach to exploring the moderating role of income source (hard-earned income and windfall income) on the promotion framing effect in a cross-category bundling context. Two promotion frames were created with identical total prices for a cross-category bundle that included both hedonic and utilitarian products. The behavioral results showed that income source moderated the effect of promotion frame on neural responses and purchase decision-making. When participants obtained a hard-earned income, they showed an attenuated N2, an enlarged LPP amplitude, and a higher purchase rate in the hedonic (vs. utilitarian) freebie condition; but when they obtained a windfall income, the effect of promotion frame disappeared. Overall, the conclusions have important ramifications for both theory and practice.