The Seller Cost Effect

Cost plays a crucial role in commodity transactions, influencing the decisions of both buyers and sellers. Previous studies have focused either on the impact of seller costs on seller decisions or the influence of buyer costs on buyer decisions. However, it remains unclear whether seller costs directly affect buyers' purchasing decisions. Across six experiments, participants consistently demonstrated a preference for items with higher seller costs. Experiment 1 had them choose between high and low seller cost items that were totally equal in other aspects, with a majority favoring the item with high seller cost. Experiment 2 involved participants pricing items, resulting in higher values for those with greater seller costs. In Experiment 3, when asked to predict others' choices, the consensus was again for high seller cost items. Experiment 4, which used a single reseller, showed a similar pattern. Finally, in Experiments 5 and 6, with stricter experimental design, the preference for higher seller cost items persisted. These findings indicate that irrelevant factors can influence consumers' valuation of products and their consumption decisions, and thus challenge traditional utility theories of decisions, which generally accommodate only relevant factors. Several nondecision theories (price unfairness perception, anti-profit belief, and zero-sum thinking) were also tested, and zero-sum thinking provides the best explanation.