Consumers believe similar others would use the same products more often and would find them more useful than they themselves would; this is due to an overestimation of other people’s materialism

Ziano, Ignazio, and Daniel Villanova. 2019. “You’d Use It More Than Me: Overestimating Products’ Usefulness to Others Because of Self-serving Materialism Attributions.” PsyArXiv. May 14. doi:10.31234/osf.io/938m7

Abstract: Six experiments (total n = 3,552, four preregistered, three incentivized) show that consumers believe similar others would use the same products more often and would find them more useful than they themselves would. Overestimation of usefulness of the same product to others is caused by the overestimation of other people’s materialism: we find that this bias reverses when consumers estimate products’ usefulness for someone very low on materialism, and is muted for less materialistic purchases. Overestimation of usefulness is muted for well-known others, as estimation accuracy increases with personal knowledge. Our findings help explain the “X effect,” which is the belief that others are willing to pay more for products (Frederick 2012). These findings connect previously parallel literature streams about self-serving bias in social comparison and biases in self-other monetary evaluations. We discuss theoretical implications for consumers’ above and below average biases, materialism, and the X effect.  We discuss practical implications for pricing, negotiation, proxy decision-making, and gift-giving.