Does a Dollar Get You a Dollar’s Worth of Merchandise? … underexplored cultural dimension,...

Does a Dollar Get You a Dollarrsquos Worth ofMerchandise The Impact of PowerDistance Belief on Price-Quality Judgments

ASHOK K LALWANILURA FORCUM

The role of cultural factors in influencing price perceptions is not understood wellin the literature The present research seeks to fill this gap by examining the linkbetween power distance beliefmdashthe acceptance and endorsement of power dis-parities in societymdashand the tendency to use the price of a product to judge its qual-ity the underlying processes and boundary conditions Three studies show thatconsumers high (vs low) in power distance belief have a greater tendency to useprice to judge quality because they have a greater need for structure which makesthem more likely to discriminate between brands and rank them based on priceThe relationships held regardless of whether the price-to-quality relation was as-sessed using a standard self-report scale or via actual product judgments andwhether power distance belief was measured or manipulated The effect wasfound to be independent of self-construal holistic thinking and risk aversion wasmediated by a need for structure and disappeared when the tendency to orderwas facilitated (impeded) by making price more (less) salient Theoretical implica-tions are discussed

Keywords culture pricing price-quality judgments power distance belief need

for structure

Consumers frequently need to estimate product qualityunder conditions of imperfect knowledge about attrib-

utes In such situations a common tendency is to use aproductrsquos price to infer its quality (ie to make price-quality judgments Cronley et al 2005 Kardes et al2004a 2004b) Considerable research attests to this

tendency and has explored conditions that facilitate or hin-der it (Monroe 2003) Much of the early research in thisarea focused on whether people use price as an indicator ofquality (Rao and Monroe 1989) Subsequent research ex-plored when people made price-quality judgments (DoddsMonroe and Grewal [1991] focused on extrinsic cues Raoand Monroe [1988] focused on prior knowledge) and theimplications of this tendency in various situations (ShivCarmon and Ariely 2005 Suri and Monroe 2003) Mostrecently research in this area has examined how con-sumersrsquo processing tendencies and beliefs affect the ten-dency to make price-quality inferences (Bornemann andHomburg 2011 Lalwani and Shavitt 2013 Yan andSengupta 2011)

The existing literature has however devoted limited at-tention to the role played by culture and values in the useof price as a quality heuristic In the current research weattempt to redress this gap and add to recent work examin-ing the role of consumersrsquo information-processing tenden-cies by investigating the effect of an important butrelatively underexplored cultural dimension namely power

Ashok K Lalwani (lalwaniindianaedu Tel 812-855-1160) is an

associate professor in the Department of Marketing Kelley School of

Business Indiana University 1309 East Tenth Street Bloomington IN

47405 Lura Forcum (lforcumclemsonedu Tel 856-656-5295) is an

assistant professor in the Department of Marketing College of Business

and Behavioral Science Clemson University 275 Sirrine Hall Clemson

SC 29630 The authors are grateful for the helpful comments of the editor

associate editor reviewers Shanker Krishnan Heeryung Kim and Jessie

Wang on previous versions of this manuscript An online appendix with

the details of all experimental procedures scales additional analyses and

two additional studies is available

Ann McGill and Darren Dahl served as editors and Rashmi Adaval

served as associate editor for this article

Advance Access publication May 5 2016

VC The Author 2016 Published by Oxford University Press on behalf of Journal of Consumer Research Inc

All rights reserved For permissions please e-mail journalspermissionsoupcom Vol 43 2016

DOI 101093jcrucw019

317

distance beliefmdashthe extent to which people accept and en-dorse hierarchy and inequality in society We also explorethe underlying mechanisms and conditions that enhance ormitigate the relation between power distance belief andprice-quality judgments

Can power distance belief influence price-quality judg-ments and if so how and why We propose that consumershigh (vs low) in power distance belief have a greater needfor structure which in turn increases their tendency to asso-ciate price with product quality Specifically we suggestthat because of their focus on hierarchy and inequality peo-ple high (vs low) in power distance belief are more con-cerned about structure as it relates to a variety of aspects oftheir lives from mentally organizing people based on statusto the arrangement of physical objects workplace behaviorsand the extent to which they organize their schedules(Hofstede 2001 Holman 1981 Marcus and Gould 2000) Inturn the need for structure leads people to discriminate be-tween brands and focus on price to rank the brands andhence to be more likely to ascribe higher quality to higherpriced brands Our findings also suggest that enhancing thesalience of price increases low but not high power distancebelief individualsrsquo tendency to make price-quality judg-ments In contrast reducing the salience of price lowershigh but not low power distance belief individualsrsquo ten-dency Further these differences cannot be accounted for byan interdependent self-construal holistic thinking or riskaversion Three studies using a variety of operationalizationsof power distance belief and price-quality judgments pro-vide converging and robust support for these relations

The issues we address have a number of theoretical im-plications for the cross-cultural price perceptions andneed for structure literatures By examining the role ofpower distance belief we bring a fresh perspective to thecross-cultural literature which is dominated by the individ-ualismndashcollectivism dimension (Shavitt et al 2006a2006b) Our research is also the first to bring power dis-tance belief to the pricing literature In addition we ad-vance theory by showing that the path from power distancebelief to price-quality judgments runs through need forstructure Furthermore we identify contextual moderatorsthat shed novel insights on the boundary conditions forprice-quality judgments Next we elaborate our predictionsand present the studies followed by a discussion of the im-plications of our findings

POWER DISTANCE BELIEF ANDPRICE-QUALITY JUDGMENTS

Power distance belief reflects the degree to which indi-viduals accept and endorse hierarchy and inequalities inpower (Hofstede 1984 2001) Although inequalities inpower exist within all societies some are more acceptingof hierarchy than others (Oyserman 2006) High power

distance belief cultures include Malaysia Mexico andIndia whereas those low in power distance belief includeAustria Denmark and Holland (Hofstede 2001) Recentresearch suggests that power distance belief is a psycholog-ical state that can also be studied at the individual level aswell as via priming procedures (Zhang Winterich andMittal 2010) The use of multiple operationalizations ofpower distance belief enables researchers to provide con-verging evidence which increases confidence in its causalrole Although power distance was the first cultural dimen-sion identified by Hofstede (1980) researchers have onlyrecently begun to examine systematically its influence onconsumer behavior (Winterich and Zhang 2014 Zhanget al 2010)

At the country level there is evidence that cultures dif-fering on power distance belief also differ in the tendencyto see price as related to quality (Huddleston and Good1998 Jo and Sarigollu 2007 Zhou Su and Bao 2002) Forinstance Japanese consumers (who are high in power dis-tance belief) compared to Australians (who are low inpower distance belief Hofstede 1980) have been shown tohave a greater tendency to rely on price to judge quality (Joand Sarigollu 2007) However these studies do not offertheoretical explanations for the relation between power dis-tance belief and price-quality judgments In the studies justcited the relation could result from other cultural differ-ences that are confounded with power distance beliefs suchas risk aversion long-term (vs short-term) focus or a ten-dency to be more prevention (vs promotion) orientedFurthermore the studies do not shed light on the underlyingmechanisms or boundary conditions of the relationshipMoreover the countries examined in these studies (egJapan and Australia) also differ on interdependence whichis another important determinant of price-quality judgments(Lalwani and Shavitt 2013) A clearer conceptualization ofthe processes at work will allow us to predict whether andwhen consumers differ in their tendency to make price-quality judgments As we discuss next the differences be-tween high and low power distance belief contexts lead tovarying degrees of need for structure which can directly in-fluence the tendency to use price to judge quality

Power Distance Belief and Need for Structure

A fundamental tenet of high power distance belief cul-tures and contexts is a need for structuremdashthe desire forclarity and order and the avoidance of ambiguity and grayareas (Carl Javidan and Gupta 2004 Hofstede 2001Thompson et al 2001) Indeed the drive for structure leadshierarchical societies to dictate specific roles for individ-uals Whether a person holds a superior or subordinate po-sition rules and expectations dictate how he or she shouldbehave (Biggart and Hamilton 1984) Thus people at boththe top and bottom of the social hierarchy benefit from thereduction of uncertainty and randomness in social

318 JOURNAL OF CONSUMER RESEARCH

interactions (Friesen et al 2014) Carl et al (2004 559)conclude that in high power distance belief cultures ldquothestable distribution of power is expected to bring order tothe society and to allow unambiguous allocation of rolesand rigid structure of relationshipsrdquo

The greater need for structure among people high (vslow) in power distance belief also extends to nonsocial do-mains (Carl et al 2004 Su et al 1999) For example acontent analysis revealed that institutional Web sites inhigh power distance belief cultures like Malaysia tend tobe more structured and orderly than those in low powerdistance belief cultures like the Netherlands (Marcus andGould 2000) As another example in high power distancebelief cultures physical spaces such as office buildings arestructured and clearly demarcated to separate subordinatesfrom superiors In contrast low power distance belief cul-tures are more likely to use open-concept floor plans thatallow superiors and subordinates to mingle (Tan andChong 2003)

Research also points to an association between prefer-ence for hierarchy and a need for structure People who en-dorse hierarchymdashregardless of whether they are at the highor low end of the hierarchymdashvalue order and organization(Leavitt 2003 Magee and Galinsky 2008) SimilarlyFriesen et al (2014) showed that hierarchies enhance theutility of structure and order compared to less hierarchicalenvironments In one study Friesen et al asked partici-pants to rate how a variety of words and phrases relate toboth hierarchy and equality Results indicated that hierar-chy (vs equality) elicited greater structure stability coor-dination predictability and order In another studyFriesen et al found that individuals with a greater need forhierarchy had a higher need for structure Similarly JiPeng and Nisbett (2000) showed participants one of twoarbitrary figures on the left side of a computer screen (ega schematic light bulb) and one of two other arbitrary fig-ures on the right side (eg a pointing finger) Results sug-gested that Chinese participants who have a higher powerdistance belief estimated a significantly higher degree ofcovariation between the figures than did Americans whohave a lower power distance belief thus creating structurein the random assortment of figures

It is important to note that although previous researchdoes not conclusively pinpoint the direction of the relation-ship between power distance belief and need for order webelieve that power distance belief influences need for or-der and not the reverse Indeed power distance belief is acultural variable whereas need for structure is a motiva-tional variable For example as noted earlier a commonlyaccepted operationalization of power distance belief (onewe use in study 2) is nationality It is easier to conceptual-ize that people in high (vs low) power distance beliefcountries (eg India vs the United States) have a higherneed for structure than to assume that people who have ahigher need for structure chose to live in high (vs low)

power distance belief countries Previous research confirmsthat culture affects motivation (instead of motivation af-fecting culture Lalwani 2009 Lalwani and Shavitt 2009Lalwani Shavitt and Johnson 2006 Lalwani Shrum andChiu 2009) For example the Japanese culturersquos emphasison interdependent behavior by individuals creates one setof influences upon motivation while the US culturersquos em-phasis on independent behavior creates a different set of in-fluences upon motivations (Markus and Kitayama 1991Oyserman and Lee 2008) Similarly research suggests thatcultural differences often arise in response to the natural re-sources present in a particular area such as the cultures ofhonor noted in regions where shepherding livestock is theprimary means of economic survival (Cohen et al 1996)These cultures motivate violent responses to even trivialinsults in order to discourage those who might steal live-stock or encroach on grazing lands (Cohen et al 1996)Can the relationship between power distance belief andneed for structure influence the tendency to make price-quality judgments We address this issue next

Power Distance Belief Need for Structure andPrice-Quality Judgments

We posit that consumers high (vs low) in power dis-tance belief are more likely to make price-quality judg-ments because of a greater need for structure (ie amediation hypothesis figure 1) The validity of this hy-pothesis depends on the proposed relation between needfor structure and price-quality judgments Although to ourknowledge no prior research has examined this relation wepropose that these variables are related for several theoreti-cal reasons

Research suggests that people higher (vs lower) in needfor structure are most comfortable when a natural structureexists if it does not they strive to bring one about(Thompson et al 2001) for instance by selectively seeingstructure in their environments (Kay et al 2014) They alsoperceive imaginary patterns such as false correlations andimages in random configurations of black-and-white dots(Whitson and Galinsky 2008) Hence consumers with agreater need for structure may be more motivated to men-tally discriminate among brands and to segregate thebrands to order or rank them Since price is one of the mostimportant alignable attributes that enables a quick and di-rect comparison between brands (Best 2012 Monroe2003) higher (vs lower) need for structure consumers maybe more likely to find price salient and use it to differenti-ate between brands and to arrange them in a pecking orderThereafter when these consumers estimate brand qualitythey may be more likely to use price to infer brand qualityeven if only subconsciously (Adaval and Monroe 2002) Incontrast consumers lower in need for structure have alesser need to arrange brands in a methodical fashion or tounderstand the position of a brand in an array As a result

LALWANI AND FORCUM 319

they are less likely to focus on dissimilarities betweenbrands and may view the quality of high- and low-pricedbrands as insignificantly different leading to a lesser ten-dency to make price-quality judgments

Research also suggests that consumers higher (vs lower)in need for structure strive to order the world into a lesscomplex and more manageable form Their overarchingobjective is the creation and use of simplified cognitivestructuresmdashsuch as schemas heuristics prototypes andscriptsmdashto conserve cognitive resources (Moskowitz 1993Neuberg and Newsom 1993 Thompson et al 2001) Thismay make them more likely to use heuristics such as theprice-quality schema Indeed a primary reason consumersuse product price to infer quality is to conserve cognitiveresources (Rao 2005) or as a shortcut due to limited knowl-edge about the product category (Rao and Monroe 1988)

The drive to use simple cognitive structures also leadspeople higher (vs lower) in need for structure to categorizeinformation using two dimensions rather than three(Schaller et al 1995) Thus they overlook situational forcesdriving a behavior in favor of dispositional factors(Schaller et al 1995) such as concluding that a brandrsquoslow price is due to inferior quality (a dispositional factor)rather than competitive forces in the market (a situationalfactor) Price and quality represent two dimensions withwhich to categorize information and thus higher (vslower) need for structure consumers may be more likely toemploy such categorization methods People higher (vslower) in need for structure also generate fewer alternativehypotheses (Mayseless and Kruglanski 1987) which maylead them to overly fixate on price rather than search forother drivers of quality

Furthermore one of the most robust findings associatedwith individuals higher (vs lower) in need for structure isthat they are more likely to engage in stereotypingmdashtheoversimplified tendency to categorize targets and viewthem not as distinct objects but instead as members of agroup about which generalized knowledge is already pos-sessed (Kaplan Wanshula and Zanna 1993 Moskowitz1993 Naccarato 1989 Neuberg and Newsom 1993Pilkington and Lydon 1997 Schaller et al 1995) One way

to stereotype products is to categorize them based on price(eg high or low) Once the categories are formed cogni-tive consistency should lead consumers to ascribe rela-tively higher quality to the high-priced group and lowerquality to the low-priced group Hence we propose

H1 Power distance belief is positively associated with the

tendency to make price-quality judgments

H2 The relationship between power distance belief and

price-quality judgments is mediated by need for structure

Factors That Strengthen or Weaken theTendency to Order

We also examine factors that enhance or diminish the re-lationship between power distance belief and price-qualityjudgments to better understand the role of need for struc-ture as the underlying mechanism As Thompson et al(2001) note the need for structure is a primary and funda-mental human goal because structure provides meaning tothe world ldquoWithout structuring [stimuli in the environ-ment] into coherent units that provide meaning the worldwould be experienced as chaos This is a disturbing and un-settling state that people are motivated to avoidreducerdquo(19) Thus all humansmdashincluding high and low power dis-tance belief individualsmdashare motivated to reduce random-ness and chaos in their surroundings leading them toprefer structure and order (Cutright 2012) although highpower distance belief individuals are more motivated to doso as it brings order to society and allows unambiguous al-location of roles and rigid structure of relationships (Carlet al 2004) Although several factors impact the need forstructure we focus on price salience which serves as aboundary condition on our effects for reasons notedpresently

We propose that individuals higher (vs lower) in needfor structure are inherently more likely to find price salientbecause these individuals need cues to structure objectsIndeed price is more easily structured compared to othernonnumeric forms of information because numerical pri-ces are readily organized from smallest to largest In

FIGURE 1

THE IMPACT OF POWER DISTANCE BELIEF ON PRICE-QUALITY JUDGMENTS

Power distance belief (independent variable)

Price-quality judgments (dependent variable)

Need for structure (mediator) (Study 2)

Salience of price

(Study 3)


contrast low power distance belief individuals have alesser need to organize information and hence are lesslikely to find price salient

Furthermore it is more difficult to rank objects usingnonnumeric information (eg product attributes) espe-cially if the attributes are nonalignable (Best 2012 Monroe2003) Thus when price is salient product ordering is facil-itated leading to a greater tendency to make price-qualityjudgments When other attributes are more salient order-ing is impeded because price information is less readilyapparent

We therefore predicted that when price salience is en-hanced low power distance belief participantsmdashwho havea lower baseline tendency to order and have scope for in-creasemdashwould be more likely to notice product price andthey would find it easier to organize product informationleading to a greater tendency to make price-quality judg-ments compared to unchanged price salience levelsHowever because high power distance belief individualsrsquotendency to make price-quality judgments is already ele-vated there is less scope of increasing it further (ie a ceil-ing effect) Hence when price salience is enhanced highpower distance belief individuals should exhibit littlechange in price-quality judgments compared to unchangedprice salience levels

Along similar lines we predicted that when the salienceof price is reduced high power distance belief individ-ualsmdashwhose baseline tendency to order brands is high andhas greater scope for decreasemdashwould be less likely to no-tice product price and would find it more difficult to orga-nize the product information leading to lower price-qualityjudgments compared to unchanged price salience levelsIndeed high power distance belief individuals are moti-vated to order things but they are less able to do so whenprice salience is reduced because they are forced to rely onanother attribute instead of price In other words whenprice salience is reduced (compared to unchanged price sa-lience levels) high power distance belief individualsrsquo abil-ity to rely on price is constrained and we thus expectedtheir tendency to make price-quality judgments to de-crease However because low power distance belief indi-vidualsrsquo already have a low tendency to make price-qualityjudgments it is difficult to decrease it further (floor effect)Hence we expected their price-quality judgments to beunchanged when price salience is reduced compared tounchanged price salience levels When neither price nor anonprice attribute was made salient (ie when price sa-lience was unchanged) we expected that high but not lowpower distance belief individuals would make price-qualityjudgments consistent with hypothesis 1 Formally

H3a When price salience price is enhanced the price-

quality judgments of low power distance belief individuals

will be elevated (compared to a condition in which price sa-

lience is unchanged) whereas those of high power belief

distance individuals will be unaffected (again compared to

a condition in which price salience is unchanged)

H3b When price salience is reduced the price-quality judg-

ments of high power distance belief individuals will be de-

creased (compared to a condition in which price salience is

unchanged) whereas those of low power distance belief in-

dividuals will be unaffected (again compared to a condition

in which price salience is unchanged)

Alternative Explanations

To show unequivocally that the relationship betweenpower distance belief and price-quality judgments isdriven by need for structure we considered it necessary toexamine several alternative explanations for our findingsFirst power distance belief has been shown to be associ-ated with interdependence at the country level (Hofstede2001) which in turn can drive price-quality judgments(Lalwani and Shavitt 2013) Although there are ample the-oretical reasons to believe that the effects of power dis-tance belief are unique from those of interdependence (asexplained in the General Discussion section) we consid-ered it prudent to ascertain the role of interdependence em-pirically Because previous research demonstrates norelation between independence and price-quality judg-ments (Lalwani and Shavitt 2013) we primarily focusedon ruling out interdependence as a rival explanationSecond self-construal differences in price-quality judg-ments arise due to differences in holistic thinking(Lalwani and Shavitt 2013) Thus we ascertained whetherpower distance belief and self-construal act via the sameor different mechanisms by testing the role of holisticthinking Third research shows that power distance beliefincreases risk aversion (Hofstede 1983) which can in-crease the tendency to infer quality from price (Zhou et al2002) Thus it could be argued that power distance beliefmay influence price-quality judgments due to risk aver-sion rather than need for structure an explanation we alsoseek to exclude

Overview of Studies

A multimethod approach was used to assess reliabilityand generalizability across three studies Price-qualityjudgments were assessed via a self-reported scale evalua-tions of brands varying in price and correlations betweenprice and perceived quality ratings of several brandsPower distance belief was either measured or manipulatedStudy 1 provided initial evidence of the relationship be-tween power distance belief and price-quality judgmentsusing real brands and it also orthogonally manipulatedpower distance belief and self-construal to show that theireffects are independent Study 2 shed light on the mediat-ing role of need for structure and extended the findings tothe cross-national domain


Study 3 explored boundary conditions We examined therelationship at three levels of the moderator (instead of themore commonly used two levels) to provide a richer expo-sition and to test our theory more rigorously Study 3 re-vealed that enhancing price salience makes low powerdistance belief individuals more likely to make price-quality judgments (compared to a condition in which pricesalience is unchanged) but it does not affect high powerdistance belief individualsrsquo price-quality judgments (againcompared to the unchanged condition) Reducing price sa-lience lowered high power distance belief individualsrsquo ten-dency to make price-quality judgments (compared to theunchanged condition) but did not affect low power distancebelief individualsrsquo tendency (again compared to theunchanged condition) Two additional studies provide evi-dence of the relationship between power distance beliefand price-quality judgments using self-reports (study 4 on-line appendix 1) and evaluations of real brands (study 5online appendix 2) We also ruled out the role of interde-pendence (studies 1 3 4 [online appendix 1] 5 [onlineappendix 2]) holistic thinking (study 2) and risk aversion(study 4 [online appendix 1])

STUDY 1 THE ROLE OF POWERDISTANCE BELIEF

The first study was designed to test the relation betweenpower distance belief and price-quality judgments (hypoth-esis 1) Further we tested whether power distance beliefand self-construal act independently on price-quality judg-ments by manipulating both variables

Method

Study 1 utilized a 2 (power distance belief high low) 2 (self-construal independent interdependent) between-subjects design Participants were 117 Mechanical Turk(MTurk) members (61 female Mage frac14 37) who com-pleted the study for a small monetary payment using an on-line survey software Online appendix 3 offers moreextensive descriptions of survey procedures stimuli andscales for all studies in the current article See online ap-pendix 4 for manipulation instructions and stimuli

Power Distance Belief Prime Participants were in-formed at the start of the survey that they would completeseveral unrelated studies that were combined for the sakeof efficiency The first task manipulated power distance be-lief Following Zhang et al (2010) participants were ran-domly assigned to form meaningful sentences fromscrambled words relating either to social hierarchy (highpower distance belief condition [N frac14 53]) or equality (lowpower distance belief condition [N frac14 64]) A sample sen-tence included ldquoSocial order for is hierarchy our neces-saryrdquo (high power distance belief condition) and ldquoSocial

order for is hierarchy our unnecessaryrdquo (low power dis-tance belief condition)

The power distance belief prime was validated via a pi-lot study (N frac14 118) that revealed that participants in thehigh (vs low) power distance belief condition scoredhigher on the 3 item power distance belief scale developedand validated by Zhang et al (2010) (a frac14 69 Mhigh PDB frac14329 Mlow PDB frac14 243 t(116) frac14 300 p lt 01 d frac14 056)The items were ldquoFor the time being I mainly think that rdquo ldquoAt this moment I feel that rdquo and ldquoOn top of mymind right now are thoughts in agreement with saying that rdquo with end points 1 frac14 ldquoSocial hierarchy is importantrdquoand 9 frac14 ldquoSocial equality is importantrdquo for all three itemsAll three items were reverse scored so that high scores in-dicated higher power distance belief

Self-Construal Prime Next following Lalwani andShavitt (2009 2013) we primed self-construal by havingparticipants read a passage about an ancient warrior askedto select a leader for the kingrsquos army In the independent(interdependent) prime condition he selects a talented gen-eral (a family member) (NIND frac14 63 NINT frac14 54)Thereafter participants rated their admiration for the war-rior The order of the power distance belief and self-construal primes was randomized

The self-construal prime was validated via a pilot study(N frac14 126) that revealed that participants in the independent(vs interdependent) condition scored higher on Triandisand Gelfandrsquos (1998) 8 item independence scale (MIND frac14534 MINT frac14 507 t(124) frac14 206 p lt 05 d frac14 037) butlower on their 8 item interdependence scale (MIND frac14 528MINT frac14 559 t(124) frac14 227 p lt 05 d frac14 041) suggest-ing that the prime was effective (A representative item forthe independence scale was ldquoI often do my own thingrdquo forthe interdependence scale it was ldquoIf a coworker gets aprize I would feel proudrdquo online appendix 3 lists allitems)

Measurement of Price-Quality Judgments The thirdand final task was used to assess the dependent variableprice-quality judgments Following Lalwani and Shavitt(2013) and Kardes et al (2004a) participants were toldthat that the purpose of the study was to examine percep-tions of quality given specific information about a productand that to operate in this world efficiently they often needto make predictions from the available information (egwhether the products they purchase will perform well)They were told that they would be shown informationabout several brands of camcorders and computer moni-tors and that they would then predict the quality of addi-tional brands

Participants were given as much time as they liked to re-view a randomly ordered table of 33 camcorders with in-formation from Consumer Reports on brand name (egSony Samsung) country of origin (eg Japan SouthKorea) model number (eg DCR-SX41) price (in


dollars) and quality (on a scale of 1 to 100) This was doneto familiarize participants with the various brands in themarketplace their prices and their quality so as to providethem with a rough baseline of prices and quality ratings ofreal brands We also expected this exercise to reduce wildguessing by participants Thereafter participants weregiven an average retail price for an anonymous camcorderbrand (ie brand A) and asked to rate its quality on a scaleof 1 to 100 This process was repeated for a total of 10 dif-ferent anonymous camcorder brands Participants nextviewed a table of information regarding 24 computer moni-tors again for as much time as they liked (online appendix4) Participants then rated the quality of 10 anonymouscomputer monitor brands based on their price The averageprice of the camcorders was $377 (range $240ndash700) withan average quality rating of 51 (range 41ndash65) and pricendashobjective quality correlation of 23 The average price ofthe computer monitors was $290 (range $130ndash900) withan average quality rating of 69 (range 55ndash79) and pricendashobjective quality correlation of 39 The correlation be-tween the presented price and participantsrsquo subjective qual-ity estimates for all camcorder and computer monitorbrands was calculated for each participant separately andthis served as our dependent variable The average pricendashsubjective quality correlation across all participants was63

Results

We used standardized variables for all analyses in thearticle We predicted that both power distance belief andinterdependence would significantly influence price-quality judgments but that their effects will not depend oneach other (ie their interaction will be nonsignificant)The data supported these expectations High (vs low)power distance belief participants perceived a significantlygreater correlation between price and quality (Mlow PDB frac1459 Mhigh PDB frac14 68 t(115) frac14 238 p lt 05 d frac14 44)as did participants with an interdependent (vs indepen-dent) self-construal (Minterdependent frac14 68 Mindependent frac1458 t(115) frac14 208 p lt 05 d frac14 39) (table 1 and figure 2)A general linear model (GLM) with price-quality judg-ments as the dependent variable revealed a significantmain effect of power distance belief (F(1 113) frac14 437 plt 05 d frac14 39) as well as self-construal (F(1 113) frac14 461p lt 05 d frac14 40) but importantly no interaction betweenthe two (F(1 113) frac14 62 p gt 43 d frac14 15)

Discussion

These results support hypothesis 1 and affirm that powerdistance belief and self-construal both influence price-quality judgments However the fact that the two variablesdo not interact suggests that the effect of power distancebelief is independent of that of self-construal (and vice

versa) Furthermore because power distance belief wasmanipulated the findings point to the causal role of powerdistance belief and suggest that the relationship is likelynot the product of other variables

STUDY 2 NEED FOR STRUCTURE ANDCROSS-NATIONAL DIFFERENCES

In study 2 we tested the mediating role of need forstructure in the relationship between power distance beliefand price-quality judgments (hypothesis 2) In addition wesought to ascertain the generalizability of our findings byusing a cross-national sample and assessed the role of ho-listic thinking

Method

A total of 154 MTurk members (34 female Mage frac1433) completed the study using an online survey softwarefor a small monetary payment Respondents were recruitedfrom both the United States and India by specifying the na-tionality of participants in the MTurk interface All Indianparticipants were proficient in English so the questionnairewas administered in English Survey instructions informedparticipants that they would complete several scales forunrelated research projects

Measures The tendency to make price-quality judg-ments was measured first via a 4 item scale (afrac14 081) de-veloped and validated by Lichtenstein Ridgway and

TABLE 1

PRICE-QUALITY CORRELATIONS (STUDY 1)

Low Power Distance Belief 59High Power Distance Belief 68Interdependents 68Independents 58

FIGURE 2

THE EFFECT OF POWER DISTANCE BELIEF ON PRICE-QUALITY JUDGMENTS IS INDEPENDENT OF THAT OF SELF-

CONSTRUAL (STUDY 1)

04

05

06

07

08

Independence prime Interdependence primePr

ice-

qual

ity ju

dgm

ents

Low PDB High PDB


Netemeyer (1993) A sample item was ldquoGenerally speak-ing the higher the price of a product the higher the qual-ityrdquo The overall mean for this scale was 641 Need forstructure was measured next using the 10 item scale vali-dated by Webster and Kruglanski (1994) (afrac14 084) Asample item included ldquoI enjoy having a clear and structuredmode of liferdquo Thereafter holistic thinking was measuredwith a 10 item scale validated by Choi et al (2003)(afrac14 078) A sample item included ldquoNothing is unrelatedrdquoAll scales were anchored by 1 frac14 Strongly disagree and 9 frac14Strongly agree

Power Distance Belief Nationality was used to opera-tionalize power distance belief Following Hofstede(2001) participants from India represented the high powerdistance belief group (N frac14 78) and participants from theUnited States represented the low power distance beliefgroup (N frac14 76) To assess power distance belief differ-ences between the two countries we measured it using the8 item power distance belief scale developed and validatedby Zhang et al (2010) (afrac14 058) following administrationof the price-quality and need for structure measures Asample item included ldquoEmployees should be encouraged toexpress disagreement with their managersrdquo (1 frac14 Stronglydisagree 9 frac14 Strongly agree) Demographic variables wereadministered last

Results

We predicted that Indians (vs Americans) would scorehigher on power distance belief and price-quality judg-ments We further predicted that need for structure wouldmediate the relationship between nationality and price-quality judgments on one hand and between power dis-tance belief and price-quality judgments on the otherFinally we expected holistic thinking to mediate the rela-tionship between nationality and price-quality judgments(in line with Lalwani and Shavitt 2013) but not that be-tween measured power distance belief and price-qualityjudgments The data supported these expectations

Effects of Nationality on Power Distance Belief andPrice-Quality Judgments As expected Indians (vsAmericans) scored higher on power distance belief(MIndians frac14 502 MAmericans frac14 398 t(152) frac14 791 plt001 d frac14 128) and also exhibited a greater tendency tomake price-quality judgments (MIndians frac14 663 MAmericans

frac14 618 t(152) frac14 198 p lt 05 dfrac1432) supporting hy-pothesis 1 (figure 3 and table 2) However because Indiansand Americans differ on numerous dimensions (includinginterdependence) it is important to show that the latter dif-ference is due to power distance belief (ie that power dis-tance belief mediates the effect of nationality on price-quality judgments) A bootstrapping procedure (ZhaoLynch and Chen 2010) using 10000 iterations revealedthat the mean indirect effect of nationality on price-quality

judgments through power distance belief was positive(038) and significant (95 confidence interval [CI] 018ndash061) excluded zero)

Mediating Role of Need for Structure Next we inves-tigated whether need for structure mediates (a) the relation-ship between nationality and price-quality judgments and(b) that between measured power distance belief and price-quality judgments Both mediations were supported For(a) a bootstrapping procedure with 10000 iterations re-vealed that the mean indirect effect of nationality on price-quality judgments through need for structure was positive(012) and significant (95 CI 002ndash027 excluded zero)For (b) a bootstrapping procedure revealed that themean indirect effect of measured power distance belief on

FIGURE 3

THE RELATIONSHIP BETWEEN POWER DISTANCE BELIEFAND PRICE-QUALITY JUDGMENTS AMONG INDIAN VERSUS

AMERICAN PARTICIPANTS (STUDY 2)

354

455

556

657

Power distance beliefs Price-quality judgments

Participant nationality

American Indian

p lt 05

p lt 001

TABLE 2

POWER DISTANCE BELIEF AND TENDENCY TO MAKE PRICE-QUALITY JUDGMENTS (STUDY 2)

Power Distance Belief Price-Quality Judgments

Indians 502 663Americans 398 618

TABLE 3

QUALITY JUDGMENTS (STUDY 3)

PriceSalienceEnhanced

PriceSalienceReduced

PriceSalienceUnchanged

Low Power Distance BeliefLow Price Condition 501 580 549High Price Condition 645 613 539High Power Distance BeliefLow Price Condition 538 510 538High Price Condition 613 555 621


price-quality judgments through need for structure waspositive (06) and significant (95 CI 001ndash015 excludedzero) Additionally serial mediation (PROCESS model 6)using a bootstrapping procedure with 10000 iterations re-vealed that the mean indirect effect of nationality on price-quality judgments through power distance belief and needfor structure was positive (005) and significant (95 CI00002ndash01621 excluded zero)

Is Holistic Thinking Also a Mediator We also investi-gated whether holistic thinking is a mediator of the rela-tionships just outlined First we expected holistic thinkingto mediate the relationship between nationality and price-quality judgments (c) consistent with Lalwani and Shavitt(2013) Second because we have predicted that power dis-tance belief and interdependence act via different mecha-nisms we expected holistic thinking not to mediate therelationship between power distance belief and price-quality judgments (d) Both expectations were supportedFor (c) a bootstrapping procedure with 10000 iterationsrevealed that the mean indirect effect of nationality onprice-quality judgments through holistic thinking was posi-tive (005) and significant (95 CI 0004ndash0161 excludedzero) For (d) a similar bootstrapping procedure revealedthat the mean indirect effect of power distance belief onprice-quality judgments through holistic thinking was posi-tive (003) but not significant (95 CI 003ndash004 in-cluded zero) Hence both expectations were supported

Discussion

Study 2 suggested that the relationship between powerdistance belief and price-quality judgments is mediated bya need for structure in support of hypothesis 2 and is inde-pendent of holistic thinking Indians (vs Americans) dem-onstrated higher need for structure and thus a greatertendency to make price-quality judgments The use of na-tionalitymdasha different operationalization of power distancebelief than in study 1mdashprovides convergent validity to oureffects

STUDY 3 SALIENCE OF PRICE

Study 3 tested the hypothesis that high (vs low) powerdistance belief individualsrsquo greater need for structure leadsthem to rely on price because it is more salient to them andbecause it readily enables discrimination among brandsWe predicted that experimentally enhancing the salience ofprice would increase low power distance belief individualsrsquoreliance on it because their baseline tendency to rely onprice is low (compared to a condition in which price sa-lience is unchanged) but it should have little effect on highpower distance belief individualsrsquo reliance on it becausetheir baseline tendency to rely on price is already high(ceiling effect Friesen et al 2014) (hypothesis 3a) Hence

when price salience is enhanced we expected both highand low power distance belief individuals to make price-quality judgments

Similarly we predicted that reducing the salience ofprice (by highlighting another attribute) would decreasehigh power distance belief individualsrsquo reliance on it (com-pared to a condition in which price salience is unchanged)but should have little effect on low power distance beliefindividualsrsquo reliance on it because of their low baselinetendency to rely on price (floor effect hypothesis 3b)Hence when price salience is reduced we expected neitherhigh nor low power distance belief individuals to makeprice-quality judgments Further when price salience isunchanged we expected high but not low power distancebelief participants to make price-quality judgments as inthe previous studies

Method

A total of 297 MTurk members (58 female Mage frac1435) completed the survey for a small monetary payment us-ing an online survey software We used a 2 (power distancebelief high low) 2 (price condition high low) 3 (sa-lience of price enhanced reduced unchanged) between-subjects design

Power Distance Belief Manipulation As in study 1participants were told that the survey was composed ofunrelated tasks that were combined for the sake of effi-ciency The first task manipulated power distance belieffollowing Zhang et al (2010) Participants read the follow-ing statement ldquoThere should be an order of inequality inthis world in which everyone has a rightful place high andlow are protected by this orderrdquo In the high (low) powerdistance belief condition participants wrote three reasonssupporting (opposing) this statement (Nhigh PDB frac14 147Nlow PDB frac14 150)

The power distance belief manipulation was validatedvia a pilot study (N frac14 102) that revealed that participantsin the high (vs low) power distance belief condition re-ported greater belief in hierarchy and inequality (as mea-sured by the 3 item power distance belief scale used in thepilot study reported in study 1 a frac14 96 Mhigh PDB frac14 344Mlow PDB frac14 237 t(100) frac14 258 p lt 05 d frac14 52) sug-gesting that the manipulation was effective

Price Manipulation Next following Lalwani andShavitt (2013) respondents viewed information about threebrands each of alarm clocks and microwaves the targetbrand as well as two other brands which provided baselineprice information We used fictitious names for the targetbrands and obtained product attributes (including price)from major online retailers Participants were randomly as-signed to either the high (N frac14 149) or low price condition(N frac14 148) with identical product descriptions across


conditions In the high (low) price condition the targetbrand was priced highest (lowest)

Price Salience Manipulation Thereafter participantswere randomly assigned to one of three price salience con-ditions which emphasized either product price (price sa-lience enhanced N frac14 101) another product attribute (pricesalience reduced N frac14 98) or neither (price salienceunchanged N frac14 98) Panel A of figure 4 presents the mi-crowave stimuli in the unchanged condition (online appen-dix 4 offers a complete listing of stimuli) To enhanceattention to price we removed price information for thetarget brand put it at the bottom of the table of product in-formation and indicated it both verbally and numerically(panel B of figure 4) To reduce attention to price we

added information about another attribute at the bottom ofthe table (panel C of figure 4) (Dodds et al 1991)

The price salience manipulation was validated via a pilotstudy (N frac14 69) that showed that participants in the price sa-lience enhanced (vs unchanged and reduced) conditionscored highest on a scale assessing the extent to whichprice was highlighted (three items each for microwave andalarm clock a frac14 85 ldquoIn the description of [the targetbrand] the price is listed separately from the rest of the at-tributes so that consumers may focus on itrdquo [1 frac14 Stronglydisagree 9 frac14 Strongly agree]rdquo ldquoIn its description [the tar-get brand] has the following attribute listed separately fromthe rest of the attributesrdquo and ldquoBased on the description of[the target brand] the marketer listed the following charac-teristic separately in order to emphasize itrdquo [Scale end

FIGURE 4

SAMPLE EXPERIMENTAL STIMULI (STUDY 3)


points for these two items 1 frac14 Sleek look packaged in aconvenient size perfect for travelingSize of 22 cubic feet5 frac14 Neither sleek look nor priceNeither size nor price 9frac14 Price]rdquo) Results indicated the salience manipulationsworked as intended (Mprice salience enhancedfrac14 588 Munchanged

frac14 441 Mprice salience reduced frac14 268 F(2 66) frac14 1220 p lt001 d frac14 121 all prsquos lt 05)

Measurement of Price-Quality Judgments andInterdependence Thereafter respondents rated the targetbrand on quality reliability and dependability (1 frac14 ldquoVerylowrdquo and 9 frac14 ldquoVery highrdquo aalarm clock frac14 90 amicrowave frac1495) the aggregate of which served as the dependent vari-able Since the only information that varied across the priceconditions was the price of the target product by comparingmean quality ratings across high and low price conditionswe were able to determine the extent to which participantsmade price-quality judgments If quality ratings were statis-tically significantly higher in the high (vs low) price condi-tion participants could be said to make price-qualityjudgments if they did not differ participants could not besaid to make such judgments1 Thereafter interdependencewas measured with an 8 item scale developed and validatedby Triandis and Gelfand (1998 a frac14 78) A representativeitem was ldquoIf a coworker gets a prize I would feel proudrdquo(1 frac14 Strongly disagree 7 frac14 Strongly agree) Demographicvariables were administered last

Results

Effect of Power Distance Belief on Price-QualityJudgments First we predicted that the effect of the pricesalience manipulation on price-quality judgments will be

different for high and low power distance belief individ-uals This prediction was supported by a GLM with qualityjudgments as the dependent variable which revealed a sig-nificant three-way interaction between power distance be-lief salience and price condition (F(2 285) frac14 316 p lt05 d frac14 21) the GLM also revealed no effect of powerdistance belief (F(1 285) frac14 41 p gt 52 d frac14 08) or sa-lience (F(2 285) frac14 33 p gt 71 d frac14 07) a significantmain effect of price condition (F(1 285) frac14 2127 p lt001 d frac14 54) and significant two-way interactions be-tween power distance belief and salience (F(2 285) frac14463 p lt 01 d frac14 25) and between price condition andsalience (F(2 285) frac14 329 p lt 05 d frac14 24) but not be-tween power distance belief and price condition (F(1 285) frac1421 pgt 64 dfrac14 05)

In the unchanged price salience condition we expectedto replicate the results of the previous studies The expecta-tion was supported In the unchanged price saliencecondition a GLM on price-quality judgments revealed noeffect of power distance belief (F(1 94) frac14 252 p gt 11dfrac14 318) or price condition (F(1 94) frac14 273 p gt 10dfrac14 33) but a significant interaction between the two(F(1 94) frac14 449 p lt 05 dfrac14 424) As predicted partici-pants who were high in power distance belief made price-quality judgments (Mlow price frac14 538 Mhigh price frac14 621t(54) frac14 259 p lt 05 dfrac1470) but those low in powerdistance belief did not (Mlow price frac14 549 Mhigh price frac14539 t(40) frac14 38 p gt 70 d frac14 12)

Test of Hypothesis 3a In hypothesis 3a we predictedthat enhancing the salience of price will increase the price-quality judgments of low but not high power distance be-lief individuals To test this hypothesis we compared theprice-quality judgments in the price salience enhanced (vsunchanged) conditions among high and low power distancebelief individuals separately For low power distance par-ticipants in the price salience enhanced and unchangedconditions the GLM revealed no effect of salience (F(187) frac14 147 p gt 22 d frac14 242) a main effect of price con-dition (F(1 87) frac14 795 p lt 01 d frac14 564) and a signifi-cant two-way interaction between salience and price(F(1 87) frac14 1060 p lt 01 d frac14 652) suggesting that en-hancing the salience of price significantly influenced lowpower distance belief individualsrsquo tendency to make price-quality judgments Contrasts suggested that low powerdistance belief participants in the price salience enhancedcondition made price-quality judgments (Mlow price frac14 501Mhigh price frac14 645 t(47) frac14 389 p lt 001 d frac14 113)while those in the unchanged price salience condition didnot (Mlow price frac14 549 Mhigh price frac14 539 t(40) frac14 37 p gt70 d frac14 170) supporting hypothesis 3a

For high power distance participants in the price salienceenhanced and unchanged conditions the GLM revealedno effect of salience (F(1 104) frac14 02 p gt 87 d frac14 28)a main effect of price condition (F(1 104) frac14 1196

FIGURE 5

THE EFFECT OF ATTRIBUTE VERSUS PRICE SALIENCE ONTHE RELATIONSHIP BETWEEN POWER DISTANCE BELIEF

AND QUALITY JUDGMENTS (STUDY 3)

49

51

53

55

57

59

61

63

65

67

Low PDB High PDB Low PDB High PDB Low PDB High PDB

Price salience enhanced Price salience reduced Price salience unchanged

Qua

lity

judg

men

ts

Low price High price

p gt 16 p gt 77 p lt 05

p lt 001

p lt 05 p gt 29

p gt 15 p gt 70

p lt 05

1 The means for this variable across conditions were as follows Mlow

price frac14 538 Mhigh price frac14 602 Mprice salience reduced frac14 571 Mprice sa-

lience enhanced frac14 575 Munchanged price salience frac14 564 MlowPDB frac14 574MhighPDB frac14 566


p lt 001 d frac14 692) and a nonsignificant two-way interac-tion between salience and price (F(1 104) frac14 03 p gt 85d frac14 34) suggesting that enhancing the salience of pricedid not change high power distance belief individualsrsquo ten-dency to make price-quality judgments As expected highpower distance participants in the price salience enhanced(Mlow price frac14 538 Mhigh price frac14 613 t(50) frac14 231 p lt05 d frac14 65) and unchanged (Mlow price frac14 537 Mhigh price

frac14 621 t(54) frac14 259 p lt 05 d frac14 70) conditions bothsaw the target brand as superior when it had a higher pricethan when it had a low price (ie made pricequalityjudgments) also supportive of hypothesis 3a

Test of Hypothesis 3b In hypothesis 3b we predictedthat reducing the salience of price will lessen the price-quality judgments of high but not low power distance be-lief individuals To test this hypothesis we compared theprice-quality judgments in the price salience reduced (vsunchanged) conditions among high and low power distancebelief individuals separately For low power distance par-ticipants in the low and unchanged price salience condi-tions a GLM revealed a main effect of salience (F(1 97)frac14 603 p lt 05 d frac14 492) no effect of price condition(F(1 97) frac14 26 p gt 60 d frac14 102) and a nonsignificanttwo-way interaction between salience and price (F(1 97)frac14 99 p gt 32 d frac14 198) suggesting that reducing the sa-lience of price did not change low power distance belief in-dividualsrsquo tendency to make price-quality judgmentsContrasts suggested that low power distance belief partici-pants did not make price-quality judgments either in theprice salience reduced condition (Mlow price frac14 580 Mhigh

price frac14 613 t(57) frac14 106 p lt 29 d frac14 28) or in theunchanged price salience condition (Mlow price frac14 549Mhigh price frac14 539 t(40) frac14 37 p gt 70 d frac14 170) support-ing hypothesis 3b

For high power distance belief participants in the reducedversus unchanged price salience conditions the GLM re-vealed a main effect of salience (F(1 91) frac14 395 p frac14 05 dfrac14 398) and price condition (F(1 91) frac14 764 p lt 01 d frac14552) and a nonsignificant two-way interaction between sa-lience and price (F(1 91) frac14 67 p gt 41 d frac14 164)Although we expected the two-way interaction to be signifi-cant it was not The reasons for this should be examined byfuture research Nevertheless as expected high power dis-tance participants in the reduced price salience condition didnot make price-quality judgments (Mlow price frac14 510 Mhigh

price frac14 555 t(37) frac14 146 p gt 15 d frac14 48) while thosein the unchanged price salience condition did (Mlow price frac14537 Mhigh price frac14 621 t(54) frac14 259 p lt 05 d frac14518) suggesting that reducing the salience of price low-ered high power distance participantsrsquo tendency to makeprice-quality judgments in support of hypothesis 3b

Independence of Power Distance Belief andInterdependence Finally we expected the effect ofpower distance belief on price-quality judgments to be

independent of self-construal The data supported this ex-pectation A GLM on the interdependence score with allthree manipulated variables and their interactions as inde-pendent variables revealed that aside from the two-way in-teraction between power distance belief and saliencewhich was marginally significant (p frac14 08) all other ef-fects were nonsignificant (prsquos ranged from 13 to 81) Ofnote the power distance belief manipulation did not affectinterdependence scores (Mlow PDB frac14 518 Mhigh PDB frac14514 t(295) frac14 42 p gt 67 d frac14 05) suggesting that thetwo acted independently of each other

In order to further assess the role of self-construal werepeated the analyses presented earlier this time includinginterdependence in the model The three-way interactionbetween power distance belief salience and price condi-tion remained significant (F(2 278) frac14 294 p frac14 05 d frac1429) but the interaction between interdependence salienceand price condition was nonsignificant (F(2 278) frac14 19 pgt 90 d frac14 09) Splitting the data by salience conditionyielded the same results as previously thus our effects per-sisted after controlling for interdependence

Discussion

Our theorization suggests that high (vs low) power dis-tance belief consumersrsquo greater need for structure leadsthem to rely on price because it is a salient attributeAccordingly experimentally enhancing the salience ofprice increased low power distance belief individualsrsquo ten-dency to make price-quality judgments compared to pricesalience unchanged levels These individuals did not makeprice-quality judgments in the price salience unchangedcondition but they did so in the price salience enhancedcondition However experimentally enhancing the salienceof price did not affect high power distance belief individ-ualsrsquo tendency to make price-quality judgments due to aceiling effectmdashindeed these individuals made price-quality judgments in both the price salience enhanced andprice salience unchanged conditions

Along similar lines experimentally reducing the sa-lience of price decreased high power distance belief indi-vidualsrsquo tendency to make price-quality judgmentscompared to price salience unchanged levels These indi-viduals made price-quality judgments in the price salienceunchanged condition but not in the price salience reducedcondition However experimentally reducing the salienceof price did not affect low power distance belief individ-ualsrsquo tendency to make price-quality judgments due to afloor effectmdashindeed these individuals did not make price-quality judgments in either the price salience reduced con-dition or the price salience unchanged condition In otherwords when price salience was enhanced (reduced) both(neither) high and (nor) low power distance belief partici-pants made price-quality judgments However when thesalience of price was unchanged high (but not low) power


distance belief participants made price-quality judgmentsas in our previous studies

In examining our results for study 3 we noted that themean quality judgments for participants low in power dis-tance belief in the reduced price salience condition ap-peared higher than expected (figure 4) Although our focuswas on the difference of means between high and low priceconditions (ie price-quality judgments) and not on theabsolute means in the high and low price conditions (iequality judgments) we speculate that low power distancebelief individuals who typically do not focus on price as acue for quality interpreted the emphasized product attrib-ute (intended to make price less salient) instead as indica-tion of greater quality because when price salience wasreduced the brand seemed to have more attributes than itscompetitors Because high power distance individuals typi-cally do focus on price as a cue for quality the reduced sa-lience of the price information indeed reduced qualityperceptions as we intended Future research should explorethis possibility That said the results support our hypothe-ses relating to price-quality judgments indeed neitherhigh nor low power distance belief individuals made price-quality judgments when price salience was reduced

GENERAL DISCUSSION

The purpose of the present article was to examine the re-lation between power distance belief and price-qualityjudgments as well as the underlying mechanisms andboundary conditions Three studies provided robust andconverging evidence for the hypothesis that consumershigh (vs low) in power distance belief have a greater ten-dency to infer a productrsquos quality based on its price be-cause they have a greater need for structure Study 1provided initial evidence of the association between powerdistance belief and price-quality judgments Study 2 dem-onstrated the mediating role of need for structure in across-national context Study 3 revealed that experimen-tally enhancing (reducing) the salience of price increased(decreased) low (high) but not high (low) power distancebelief participantsrsquo tendency to make price-quality judg-ments That is when the salience of price was enhanced(reduced) both (neither) high and (nor) low power distancebelief participants made price-quality judgments (Lalwaniand Monroe 2005) However when the salience of pricewas unchanged high (but not low) power distance beliefparticipants made price-quality judgments as in our previ-ous studies

Each of these studies also revealed that the effect ofpower distance belief on price-quality judgments is indepen-dent of self-construal or holistic thinking We found that thecore effect exists regardless of whether power distance be-lief and need for structure are chronically or temporarily ac-cessible and with several different operationalizations of

price-quality judgments in a number of product categoriesThese convergent results indicate that our findings are ro-bust and reliable Moreover our findings are consistent withthose of Guimond et al (2007 also Guimond et al 2006Hamamura 2012) who found that high (vs low) power dis-tance belief individuals are more likely to make compari-sons within a single category than across categories whichmay make them more likely to evaluate products based onthe same attribute (ie price) rather than a mix of attributes

Theoretical Contributions

Our findings offer contributions to the cross-culturalprice perceptions and need for structure literaturesPrevious cross-cultural research has primarily focused onthe individualismndashcollectivism dimension even thoughpower distance was the first cultural dimension identifiedby Hofstede (1984) As Shavitt et al (2006a) note cross-cultural researchers need to move beyond theindividualism-collectivism dichotomy due to the limita-tions inherent in any single dimension The current re-search is among the first to demonstrate experimentally thecritical role played by power distance belief in consumerjudgments Further by measuring and manipulating powerdistance belief we also show that this cultural value orien-tation can be fruitfully studied at the individual level

Our work contributes to the price-quality literature byidentifying a novel mechanism that causes people to useprice to judge qualitymdashthat of need for structure Our workalso suggests that the tendency to infer quality from pricemay not be a marketing universal as claimed by some re-searchers (Dawar and Parker 1994) Psychologists are in-creasingly concerned with the notion that culturaldifferences in research participants may disguise importantdifferences in a variety of phenomena previously regardedas culturally invariant (Lehman Chiu and Schaller 2004)While the multiple cultural and socioeconomic differencesbetween countries makes it difficult to isolate the role ofculture when comparing countries priming power distancebelief levels in relatively homogeneous samples of researchparticipants allows for the investigation of this phenomenonin more depth In so doing our research is the first to intro-duce power distance belief to the pricing literature

We also contribute to the literature on need for structureby demonstrating that it (1) triggers greater reliance onprice to judge a productrsquos quality and (2) is responsible forthe link between power distance belief and price-qualityjudgments That is we show that the tendency of higher(vs lower) need for structure consumers to see the world intwo- (vs three-) dimensional terms (Schaller et al 1995)leads them to be more likely to make price-quality judg-ments Finally by showing that the link between powerdistance belief and price-quality judgments is moderatedby price salience we shed insights on the boundary condi-tions for our effects


The Role of Self-Construal

Recent research suggests that consumers with an interde-pendent (vs independent) self-construal are more likely tomake price-quality judgments (Lalwani and Shavitt 2013)Other research conducted at the national level points to alink between power distance belief and interdependence(Hofstede 1980) This may lead to the argument that the ef-fects we propose can be derived from extant literatureHowever this conclusion is unwarranted for several rea-sons First as Hofstede (1984 1985) argues power dis-tance belief and self-construal are distinct theoreticalconstructs with vastly different antecedents and conse-quences It is thus possible for countries to be high in inter-dependence but low in power distance belief (eg CostaRica) and low in interdependence but high in power dis-tance belief (eg Spain and South Africa) (Hofstede1984) Second interdependents engage in price-qualityjudgments because they are holistic thinkers (Lalwani andShavitt 2013) whereas power distance belief affects price-quality judgments because of a greater need for structureThe mechanisms underlying the two relationships are thuscompletely different Indeed as we demonstrate the effectof power distance belief on price-quality judgments is in-dependent of holistic thinking

Third the evidence on the relationship between powerdistance and interdependence is mixed As noted Hofstedefound a positive association between the two whereasRathod and Miranda (1999) found lower levels of interde-pendence when power distance was high (study 5 [onlineappendix 1] and online appendix 7) Fourth from a con-ceptual standpoint the independencendashinterdependence (orat the national level individualismndashcollectivism) constructis further refined by a verticalndashhorizontal dimension whichis orthogonal to the independencendashinterdependence dimen-sion (Singelis et al 1995 Triandis and Gelfand 1998) Theverticalndashhorizontal dimension closely corresponds topower distance belief (Oyserman 2006 Shavitt et al2006a) Considerable research demonstrates that account-ing for the verticalndashhorizontal dimension significantly en-hances the explanatory power of the broad independencendashinterdependence dimension (Lalwani Shavitt and Johnson2006 Shavitt et al 2006a) which further suggests thatpower distance belief and interdependence are differentconstructs Fifth Hofstede (1984 1985) reported that con-trolling for national wealth eliminated the correlation be-tween collectivism and power distance belief It thusappears that the link between collectivism and power dis-tance belief is spuriousmdashcountries high in collectivismmay score high on power distance belief because they tendto have low national wealth

Accordingly we found that the effect of power distancebelief on price-quality judgments holds after controllingfor self-construal (studies 1 3 4 [in online appendix 1]and 5 [in online appendix 2]) and holistic thinking (study

2) Second the interaction between power distance beliefand interdependence is nonsignificant (studies 1 3 4 [in online appendix 1] and 5 [in online appendix 2]) indicatingthat the effect of power distance belief is independent ofthe degree of interdependence Third factor analysesshowed that the items tapping power distance belief andself-construal load on distinct factors (online appendixes 4and 5) Fourth we orthogonally manipulated both powerdistance belief and self-construal and found that both inde-pendently influence price-quality judgments (study 1)Fifth the correlation between power distance belief andself-construal across studies is not consistent either in va-lence or significance Indeed a meta-analysis revealed norelationship between the two (online appendix 7)

Managerial Implications

In an economic climate where there is considerabledownward pressure on prices due to factors such as unem-ployment and stagnating wages the ability to identify andtarget consumers who are willing to pay more for high-quality products can help protect firm profits (Monroe2003) Moreover particular countries states or regionsthat are known to have high levels of power distance belief(eg southern states Carl et al 2004) may be less pricesensitive and thus may be more receptive to high-pricedproducts In such places marketers would be advised touse caution when communicating that products are dis-counted Additionally the link between need for structureand political conservatism (Jost et al 2003) suggests thatmore expensive products might be more successfullylaunched in politically conservative states or cities becauseresidents will be more likely to view the higher cost as jus-tified by higher quality Inexpensive products might bemore successfully launched in less conservative regions be-cause residents are less likely to view their lower cost assignaling lower quality

Further advertisements or messages that evoke powerdistance belief (eg by highlighting hierarchy-endorsingslogans such as ldquofor those who want to reach the toprdquo) mayincrease consumersrsquo reliance on product price to infer itsquality and their willingness to pay more for higher qualitygoods Likewise advertisements that emphasize equalityand egalitarianism (eg the slogan ldquoeveryone deserves thebestrdquo) may lessen consumersrsquo belief that a high-pricedgood is a high-quality one

Limitations and Directions for Future Research

The current investigation has several limitations Firstwe examined price-quality judgments in only a few prod-uct categories Future research should attempt to ascertainour findings using additional product categoriesMoreover the studies were conducted in controlled envi-ronments with limited information about attributes other


than price This was important to ensure a clean internallyvalid test of the theoretical framework Consumers oftenhave more information on brand attributes however andfuture research should explore its impact Future researchshould also use field experiments to examine the robust-ness of our results

Further exploration is warranted regarding the link be-tween power distance belief and need for structure We canimagine that the importance of understanding social struc-ture and also of signaling high social standing (either de-sired or actual) may explain why high power distancebelief individuals are higher in need for structure (vs lowpower distance belief individuals) Future research shouldexamine this relationship in greater depth Additionallyprior work has shown that need for structure predicts politi-cal conservatism a central tenet of which is the legitimacyof social and economic inequality (Jost et al 2003) Hencepolitically conservative people with their higher need forstructure may be more likely to make price-quality judg-ments This too is an interesting proposition for future re-searchers to examine

In addition we found that enhancing (reducing) the sa-lience of price increases (decreases) price-quality judgmentsamong low (high) power distance belief participantsHowever price is not the only possible numeric attribute andproducts sometimes have other attributes stated in numericform Although we expect all numeric (vs verbal) informa-tion to be easier to rank future research should ascertain thisrelationship and also explore whether price salience can bemanipulated using numeric information other than price

This research also suggests that the tendency of highpower distance belief individuals to form product rankingsmay result from a similar tendency to form rankings ofpeople Mentally creating a social hierarchy enables an in-dividual to interact with others according to the appropriatenorms for high- or low-ranking people Thus our findingsprovide further evidence of the use of social cognition tounderstand products (eg Chandler and Schwarz 2010Gurhan-Canli 2003 Kim and McGill 2011) a subject de-serving of further study

Future research should also explore how other culturalfactors (eg masculinityndashfemininity uncertainty orienta-tion) impact price-quality judgments Product categoryknowledge (Rao and Monroe 1988) and ease of evaluationof the product category (ie whether it is an informationversus credence good Nelson 1970) are also boundaryconditions deserving of future exploration

DATA COLLECTION INFORMATION

The data for studies 1 2 3 and 5 (in online appendix 2)were collected via MTurk between October 2012 andNovember 2015 by Ashok K Lalwani The data for study4 (in online appendix 1) were collected using

undergraduate students at Indiana University in March2015 by a research assistant under the supervision ofAshok K Lalwani Data for all studies were analyzed byboth Ashok K Lalwani and Lura Forcum

REFERENCES

Adaval Rashmi and Kent B Monroe (2002) ldquoAutomaticConstruction and Use of Contextual Information for Productand Price Evaluationsrdquo Journal of Consumer Research 28(4) 572ndash88

Best Roger J (2012) Market-Based Management Strategies forGrowing Customer Value and Profitability 6th ed NewYork Prentice Hall

Biggart Nicole Woolsey and Gary G Hamilton (1984) ldquoThePower of Obediencerdquo Administrative Science Quarterly 29(4) 540ndash49

Bornemann Torsten and Christian Homburg (2011)ldquoPsychological Distance and the Dual Role of PricerdquoJournal of Consumer Research 38 (3) 490ndash504

Carl Dale Mansour Javidan and Vipin Gupta (2004) ldquoPowerDistancerdquo in Culture Leadership and Organizations TheGlobe Study of 62 Societies ed Robert J House Paul JHanges Mansour Javidan Peter W Dorfman and VipinGupta Thousand Oaks CA Sage 513ndash59

Chandler Jesse and Norbert Schwarz (2010) ldquoUse Does NotWear Ragged the Fabric of Friendship Thinking of Objectsas Alive Makes People Less Willing to Replace ThemrdquoJournal of Consumer Psychology 20 (2) 138ndash45

Choi Incheol Reeshad Dalal Chu Kim-Prieto and HyekyungPark (2003) ldquoCulture and Judgment of Causal RelevancerdquoJournal of Personality and Social Psychology 84 (January)46ndash59

Cohen Dov Richard E Nisbett Brian F Bowdle and NorbertSchwarz (1996) ldquoInsult Aggression and the SouthernCulture of Honor An lsquoExperimental Ethnographyrsquoldquo Journalof Personality and Social Psychology 70 (5) 945ndash60

Cronley Maria L Steven S Posavac Tracy Meyer Frank RKardes and James J Kellaris (2005) ldquoA SelectiveHypothesis Testing Perspective on Price-Quality Inferenceand Inference-Based Choicerdquo Journal of ConsumerPsychology 15 (2) 159ndash69

Cutright Keisha M (2012) ldquoThe Beauty of Boundaries Whenand Why We Seek Structure in Consumptionrdquo Journal ofConsumer Research 38 (5) 775ndash90

Dawar Niraj and Philip Parker (1994) ldquoMarketing UniversalsmdashConsumersrsquo Use of Brand-Name Price Physical Appearanceand Retailer Reputation as Signals of Product QualityrdquoJournal of Marketing 58 (2) 81ndash95

Dodds William B Kent B Monroe and Dhruv Grewal (1991)ldquoEffects of Price Brand and Store Information on BuyersrsquoProduct Evaluationsrdquo Journal of Marketing Research 28(3) 307ndash19

Friesen Justin P Aaron C Kay Richard P Eibach and Adam DGalinsky (2014) ldquoSeeking Structure in Social OrganizationCompensatory Control and the Psychological Advantages ofHierarchyrdquo Journal of Personality and Social Psychology106 (4) 590ndash609

Guimond Serge Nyla R Branscombe Sophie Brunot AbrahamP Buunk Armand Chatard Michel Desert Donna MGarcia Shamsul Haque Delphine Martinot and VincentYzerbyt (2007) ldquoCulture Gender and the Self Variations


and Impact of Social Comparison Processesrdquo Journal ofPersonality and Social Psychology 92 (6) 1118ndash34

Guimond Serge Armand Chatard Delphine Martinot Richard JCrisp and Sandrine Redersdorff (2006) ldquoSocial ComparisonSelf-Stereotyping and Gender Differences in Self-Construalsrdquo Journal of Personality and Social Psychology90 (2) 221ndash42

Gurhan-Canli Zeynep (2003) ldquoThe Effect of ExpectedVariability of Product Quality and Attribute Uniqueness onFamily Brand Evaluationsrdquo Journal of ConsumerResearch 30 (1) 105ndash14

Hamamura Takeshi (2012) ldquoPower Distance Predicts GenderDifferences in Math Performance across Societiesrdquo SocialPsychological and Personality Science 3 (5) 545ndash48

Hofstede Geert H (1980) Culturersquos Consequences InternationalDifferences in Work-Related Values Newbury Park CASage

mdashmdashmdash(1983) ldquoThe Cultural Relativity of Organizational Practicesand Theoriesrdquo Journal of International Business Studies 14(2) 75ndash89

mdashmdashmdash(1984) ldquoCultural Dimensions in Management and PlanningrdquoAsia Pacific Journal of Management 1 (2) 81ndash99

mdashmdashmdash (1985) ldquoThe Interaction between National andOrganizational Value Systemsrdquo Journal of ManagementStudies 22 (4) 347ndash57

mdashmdashmdash (2001) Culturersquos Consequences Comparing ValuesBehaviors Institutions and Organizations Across NationsThousand Oaks CA Sage

Holman Rebecca H (1981) ldquoThe Imagination of the Future AHidden Concept in the Study of Consumer DecisionMakingrdquo Advances in Consumer Research 8 (1) 187ndash91

Huddleston Patricia and Linda K Good (1998) ldquoThe Price-Quality Relationship Does It Hold True for Russian andPolish Consumersrdquo The International Review of RetailDistribution and Consumer Research 8 (1) 33ndash51

Ji Li-Jun Kaiping Peng and Richard E Nisbett (2000) ldquoCultureControl and Perception of Relationships in the EnvironmentrdquoJournal of Personality and Social Psychology 78 (5) 943ndash55

Jo Myung-Soo and Emine Sarigollu (2007) ldquoCross-CulturalDifferences of Price-Perceived Quality RelationshipsrdquoJournal of International Consumer Marketing 19 (4) 59ndash74

Jost John T Jack Glaser Arie W Kruglanski and Frank JSulloway (2003) ldquoPsychological Conservatism as MotivatedSocial Cognitionrdquo Psychological Bulletin 129 (3) 339ndash75

Kaplan Martin F L Tatiana Wanshula and Mark P Zanna(1993) ldquoTime Pressure and Information Integration in SocialJudgmentrdquo in Time Pressure and Stress in Human Judgmentand Decision Making ed ed A John Maule and OlaSvenson New York Springer 255ndash67

Kardes Frank R Maria L Cronley James J Kellaris and StevenS Posavac (2004a) ldquoThe Role of Selective InformationProcessing in Price-Quality Inferencerdquo Journal of ConsumerResearch 31 (2) 368ndash74

Kardes Frank R Steven S Posavac and Maria L Cronley(2004b) ldquoConsumer Inference A Review of ProcessesBases and Judgment Contextsrdquo Journal of ConsumerPsychology 14 (3) 230ndash56

Kay Aaron C Kristin Laurin Grainne M Fitzsimons and MarkJ Landau (2014) ldquoA Functional Basis for Structure-SeekingExposure to Structure Promotes Willingness to Engage inMotivated Actionrdquo Journal of Experimental PsychologyGeneral 143 (2) 486ndash91

Kim Sara and Ann L McGill (2011) ldquoGaming with Mr Slot orGaming the Slot Machine Power Anthropomorphism andRisk Perceptionrdquo Journal of Consumer Research 38 (1)94ndash107

Lalwani Ashok K (2009) ldquoThe Distinct Influence of CognitiveBusyness and Need for Closure on Cultural Differences inSocially Desirable Respondingrdquo Journal of ConsumerResearch 36 (2) 305ndash16

Lalwani Ashok K and Kent B Monroe (2005) ldquoA Re-Examination of Frequency-Depth Effects in Consumer PriceJudgmentsrdquo Journal of Consumer Research 32 (3) 480ndash85

Lalwani Ashok K and Sharon Shavitt (2009) ldquoThe ldquoMerdquo I Claimto Be Cultural Self-Construal Elicits Self-PresentationalGoal Pursuitrdquo Journal of Personality and Social Psychology97 (1) 88ndash102

mdashmdashmdash (2013) ldquoYou Get What You Pay For Self-ConstrualInfluences Price-Quality Judgmentsrdquo Journal of ConsumerResearch 40 (2) 255ndash67

Lalwani Ashok K Sharon Shavitt and Timothy Johnson (2006)ldquoWhat Is the Relation Between Cultural Orientation andSocially Desirable Respondingrdquo Journal of Personality andSocial Psychology 90 (1) 165ndash78

Lalwani Ashok K L J Shrum and Chi-Yue Chiu (2009)ldquoMotivated Response Styles The Role of Cultural ValuesRegulatory Focus and Self-Consciousness in SociallyDesirable Respondingrdquo Journal of Personality and SocialPsychology 96 (4) 870ndash82

Leavitt Harold J (2003) ldquoWhy Hierarchies Thriverdquo HarvardBusiness Review 81 (3) 96ndash102 41

Lehman Darrin R Chi Yue Chiu and Mark Schaller (2004)ldquoPsychology and Culturerdquo Annual Review of Psychology 55689ndash714

Lichtenstein Donald R Nancy M Ridgway and Richard GNetemeyer (1993) ldquoPrice Perceptions and ConsumerShopping Behavior A Field Studyrdquo Journal of MarketingResearch 30 (2) 234ndash45

Magee Joe C and Adam D Galinsky (2008) ldquo8 SocialHierarchy The Self-Reinforcing Nature of Power andStatusrdquo Academy of Management Annals 2 (1) 351ndash98

Marcus Aaron and Emilie West Gould (2000) ldquoCrosscurrentsCultural Dimensions and Global Web User-InterfaceDesignrdquo Interactions 7 (4) 32ndash46

Markus Hazel R and Shinobu Kitayama (1991) ldquoCulture and theSelf Implications for Cognition Emotion and MotivationrdquoPsychological Review 98 (2) 224ndash53

Mayseless Ofra and Arie W Kruglanski (1987) ldquoWhat MakesYou So Sure Effects of Epistemic Motivations onJudgmental Confidencerdquo Organizational Behavior andHuman Decision Processes 39 (2) 162ndash83

Monroe Kent B (2003) Pricing Making Profitable DecisionsNew York McGraw Hill

Moskowitz Gordon B (1993) ldquoPerson Organization with aMemory Set Are Spontaneous Trait Inferences PersonalityCharacterizations or Behaviour Labelsrdquo European Journalof Personality 7 (3) 195ndash208

Naccarato Michael E (1989) ldquoThe Impact of Need for Structureon Stereotyping and Discriminationrdquo unpublished masterrsquosthesis University of Waterloo Ontario Canada

Nelson Phillip (1970) ldquoInformation and Consumer BehaviorrdquoJournal of Political Economy 78 (2) 311ndash29

Neuberg Steve L and Jason T Newsom (1993) ldquoPersonal Needfor Structure Individual Differences in the Desire for Simple


Structurerdquo Journal of Personality and Social Psychology 65(1) 113ndash31

Oyserman Daphna (2006) ldquoHigh Power Low Power andEquality Culture Beyond Individualism and CollectivismrdquoJournal of Consumer Psychology 16 (4) 352ndash56

Oyserman Daphna and Spike W S Lee (2008) ldquoDoes CultureInfluence What and How We Think Effects of PrimingIndividualism and Collectivismrdquo Psychological Bulletin134 (2) 311ndash42

Pilkington Neil W and John E Lydon (1997) ldquoThe RelativeEffect of Attitude Similarity and Attitude Dissimilarity onInterpersonal Attraction Investigating the Moderating Rolesof Prejudice and Group Membershiprdquo Personality and SocialPsychology Bulletin 23 (2) 107ndash22

Rao Akshay R (2005) ldquoThe Quality of Price as a Quality CuerdquoJournal of Marketing Research 42 (4) 401ndash05

Rao Akshay R and Kent B Monroe (1988) ldquoThe ModeratingEffect of Prior Knowledge on Cue Utilization in ProductEvaluationsrdquo Journal of Consumer Research 15 (2) 253ndash64

mdashmdashmdash (1989) ldquoThe Effect of Price Brand Name and Store Nameon Buyersrsquo Perceptions of Product Quality An IntegrativeReviewrdquo Journal of Marketing Research 26 (3) 351ndash57

Rathod Monika M and Shaila M Miranda (1999) ldquoTelework andPsychological Distance The Mediating Effects of Cultureand Technology in Four Countriesrdquo in Proceedings of the1999 ACM SIGCPR Conference on Computer PersonnelResearch New Orleans LA Association for ComputingMachinery 268ndash75

Schaller Mark Carrie Boyd Jonathan Yohannes and MeredithOrsquoBrien (1995) ldquoThe Prejudiced Personality RevisitedPersonal Need for Structure and Formation of ErroneousGroup Stereotypesrdquo Journal of Personality and SocialPsychology 68 (3) 544ndash55

Sharma Piyush (2010) ldquoMeasuring Personal CulturalOrientations Scale Development and Validationrdquo Journal ofthe Academy of Marketing Science 38 (6) 787ndash806

Shavitt Sharon Ashok K Lalwani Jing Zhang and Carlos JTorelli (2006a) ldquoThe HorizontalVertical Distinction inCross-Cultural Consumer Researchrdquo Journal of ConsumerPsychology 16 (4) 325ndash42

Shavitt Sharon Jing Zhang Carlos J Torelli and Ashok KLalwani (2006b) ldquoReflections on the Meaning and Structureof the HorizontalVertical Distinctionrdquo Journal of ConsumerPsychology 16 (4) 357ndash62

Shiv Baba Ziv Carmon and Dan Ariely (2005) ldquoPlacebo Effectsof Marketing Actions Consumers May Get What They PayForrdquo Journal of Marketing Research 42 383ndash93

Singelis Theodore M Harry C Triandis Dharm Bhawuk andMichelle J Gelfand (1995) ldquoHorizontal and VerticalDimensions of Individualism and Collectivism ATheoretical and Measurement Refinementrdquo Cross-Cultural

Research The Journal of Comparative Social Science 29(3) 240ndash75

Su Steven K Chi-yue Chiu Ying-yi Hong Kwok LeungKaiping Peng and Michael W Morris (1999) ldquoSelf-Organization and Social Organization Us and ChineseConstructionsrdquo in The Psychology of the Social Self ed TomR Tyler Roderick Moreland Kramer and Oliver P JohnNew York Psychology Press 193-222

Suri Rajneesh and Kent B Monroe (2003) ldquoThe Effects of TimeConstraints on Consumersrsquo Judgments of Prices andProductsrdquo Journal of Consumer Research 30 (1) 92ndash104

Tan Willie and Eddie Chong (2003) ldquoPower Distance inSingapore Construction Organizations Implications forProject Managersrdquo International Journal of ProjectManagement 21 (7) 529ndash36

Thompson Megan M Michael E Naccarato Kevin C H Parkerand Gordon B Moskowitz (2001) ldquoThe Personal Need forStructure and Personal Fear of Invalidity MeasuresHistorical Perspectives Current Applications and FutureDirectionsrdquo in Cognitive Social Psychology The PrincetonSymposium on the Legacy and Future of Social Cognitioned Gordon B Moskowitz New York Psychology Press19ndash39

Triandis Harry C and Michele J Gelfand (1998) ldquoConvergingMeasurement of Horizontal and Vertical Individualism andCollectivismrdquo Journal of Personality and Social Psychology74 (1) 118ndash28

Webster Donna M and Arie W Kruglanski (1994) ldquoIndividualDifferences in Need for Cognitive Closurerdquo Journal ofPersonality and Social Psychology 67 (6) 1049ndash62

Whitson Jennifer A and Adam D Galinsky (2008) ldquoLackingControl Increases Illusory Pattern Perceptionrdquo Science 322(5898) 115ndash17

Winterich Karen Page and Yinlong Zhang (2014) ldquoAcceptingInequality Deters Responsibility How Power DistanceDecreases Charitable Behaviorrdquo Journal of ConsumerResearch 41 (2) 274ndash93

Yan Dengfeng and Jaideep Sengupta (2011) ldquoEffects ofConstrual Level on the Price-Quality Relationshiprdquo Journalof Consumer Research 38 (2) 376ndash89

Zhang Yinlong Karen P Winterich and Vikas Mittal (2010)ldquoPower-Distance Belief and Impulsive Buyingrdquo Journal ofMarketing Research 47 (5) 945ndash54

Zhao Xinshu John G Lynch Jr and Qimei Chen (2010)ldquoReconsidering Baron and Kenny Myths and Truths AboutMediation Analysisrdquo Journal of Consumer Research 37 (2)197ndash206

Zhou Kevin Z Centing Su and Yeqing Bao (2002) ldquoA Paradoxof PricendashQuality and Market Efficiency A ComparativeStudy of the Us and China Marketsrdquo International Journal ofResearch in Marketing 19 (4) 349ndash65


Copyright of Journal of Consumer Research is the property of Oxford University Press USAand its content may not be copied or emailed to multiple sites or posted to a listserv withoutthe copyright holders express written permission However users may print download oremail articles for individual use

distance beliefmdashthe extent to which people accept and en-dorse hierarchy and inequality in society We also explorethe underlying mechanisms and conditions that enhance ormitigate the relation between power distance belief andprice-quality judgments

Can power distance belief influence price-quality judg-ments and if so how and why We propose that consumershigh (vs low) in power distance belief have a greater needfor structure which in turn increases their tendency to asso-ciate price with product quality Specifically we suggestthat because of their focus on hierarchy and inequality peo-ple high (vs low) in power distance belief are more con-cerned about structure as it relates to a variety of aspects oftheir lives from mentally organizing people based on statusto the arrangement of physical objects workplace behaviorsand the extent to which they organize their schedules(Hofstede 2001 Holman 1981 Marcus and Gould 2000) Inturn the need for structure leads people to discriminate be-tween brands and focus on price to rank the brands andhence to be more likely to ascribe higher quality to higherpriced brands Our findings also suggest that enhancing thesalience of price increases low but not high power distancebelief individualsrsquo tendency to make price-quality judg-ments In contrast reducing the salience of price lowershigh but not low power distance belief individualsrsquo ten-dency Further these differences cannot be accounted for byan interdependent self-construal holistic thinking or riskaversion Three studies using a variety of operationalizationsof power distance belief and price-quality judgments pro-vide converging and robust support for these relations

The issues we address have a number of theoretical im-plications for the cross-cultural price perceptions andneed for structure literatures By examining the role ofpower distance belief we bring a fresh perspective to thecross-cultural literature which is dominated by the individ-ualismndashcollectivism dimension (Shavitt et al 2006a2006b) Our research is also the first to bring power dis-tance belief to the pricing literature In addition we ad-vance theory by showing that the path from power distancebelief to price-quality judgments runs through need forstructure Furthermore we identify contextual moderatorsthat shed novel insights on the boundary conditions forprice-quality judgments Next we elaborate our predictionsand present the studies followed by a discussion of the im-plications of our findings

POWER DISTANCE BELIEF ANDPRICE-QUALITY JUDGMENTS

Power distance belief reflects the degree to which indi-viduals accept and endorse hierarchy and inequalities inpower (Hofstede 1984 2001) Although inequalities inpower exist within all societies some are more acceptingof hierarchy than others (Oyserman 2006) High power

distance belief cultures include Malaysia Mexico andIndia whereas those low in power distance belief includeAustria Denmark and Holland (Hofstede 2001) Recentresearch suggests that power distance belief is a psycholog-ical state that can also be studied at the individual level aswell as via priming procedures (Zhang Winterich andMittal 2010) The use of multiple operationalizations ofpower distance belief enables researchers to provide con-verging evidence which increases confidence in its causalrole Although power distance was the first cultural dimen-sion identified by Hofstede (1980) researchers have onlyrecently begun to examine systematically its influence onconsumer behavior (Winterich and Zhang 2014 Zhanget al 2010)

At the country level there is evidence that cultures dif-fering on power distance belief also differ in the tendencyto see price as related to quality (Huddleston and Good1998 Jo and Sarigollu 2007 Zhou Su and Bao 2002) Forinstance Japanese consumers (who are high in power dis-tance belief) compared to Australians (who are low inpower distance belief Hofstede 1980) have been shown tohave a greater tendency to rely on price to judge quality (Joand Sarigollu 2007) However these studies do not offertheoretical explanations for the relation between power dis-tance belief and price-quality judgments In the studies justcited the relation could result from other cultural differ-ences that are confounded with power distance beliefs suchas risk aversion long-term (vs short-term) focus or a ten-dency to be more prevention (vs promotion) orientedFurthermore the studies do not shed light on the underlyingmechanisms or boundary conditions of the relationshipMoreover the countries examined in these studies (egJapan and Australia) also differ on interdependence whichis another important determinant of price-quality judgments(Lalwani and Shavitt 2013) A clearer conceptualization ofthe processes at work will allow us to predict whether andwhen consumers differ in their tendency to make price-quality judgments As we discuss next the differences be-tween high and low power distance belief contexts lead tovarying degrees of need for structure which can directly in-fluence the tendency to use price to judge quality

Power Distance Belief and Need for Structure

A fundamental tenet of high power distance belief cul-tures and contexts is a need for structuremdashthe desire forclarity and order and the avoidance of ambiguity and grayareas (Carl Javidan and Gupta 2004 Hofstede 2001Thompson et al 2001) Indeed the drive for structure leadshierarchical societies to dictate specific roles for individ-uals Whether a person holds a superior or subordinate po-sition rules and expectations dictate how he or she shouldbehave (Biggart and Hamilton 1984) Thus people at boththe top and bottom of the social hierarchy benefit from thereduction of uncertainty and randomness in social























FIGURE 1





Salience of price

(Study 3)




















Overview of Studies






Method











Results


Discussion





Method



TABLE 1



FIGURE 2


CONSTRUAL (STUDY 1)

04

05

06

07

08


ice-

qual

ity ju

dgm

ents

Low PDB High PDB




Results






FIGURE 3



354

455

556

657



American Indian

p lt 05

p lt 001

TABLE 2




TABLE 3









Discussion






Method










FIGURE 4






Results






FIGURE 5



49

51

53

55

57

59

61

63

65

67



Qua

lity

judg

men

ts


p gt 16 p gt 77 p lt 05

p lt 001

p lt 05 p gt 29

p gt 15 p gt 70

p lt 05














Discussion






GENERAL DISCUSSION




























REFERENCES








































































































FIGURE 1





Salience of price

(Study 3)




















Overview of Studies






Method











Results


Discussion





Method



TABLE 1



FIGURE 2


CONSTRUAL (STUDY 1)

04

05

06

07

08


ice-

qual

ity ju

dgm

ents

Low PDB High PDB




Results






FIGURE 3



354

455

556

657



American Indian

p lt 05

p lt 001

TABLE 2




TABLE 3









Discussion






Method










FIGURE 4






Results






FIGURE 5



49

51

53

55

57

59

61

63

65

67



Qua

lity

judg

men

ts


p gt 16 p gt 77 p lt 05

p lt 001

p lt 05 p gt 29

p gt 15 p gt 70

p lt 05














Discussion






GENERAL DISCUSSION




























REFERENCES





































































































Overview of Studies






Method











Results


Discussion





Method



TABLE 1



FIGURE 2


CONSTRUAL (STUDY 1)

04

05

06

07

08


ice-

qual

ity ju

dgm

ents

Low PDB High PDB




Results






FIGURE 3



354

455

556

657



American Indian

p lt 05

p lt 001

TABLE 2




TABLE 3









Discussion






Method










FIGURE 4






Results






FIGURE 5



49

51

53

55

57

59

61

63

65

67



Qua

lity

judg

men

ts


p gt 16 p gt 77 p lt 05

p lt 001

p lt 05 p gt 29

p gt 15 p gt 70

p lt 05














Discussion






GENERAL DISCUSSION




























REFERENCES






















































































Method











Results


Discussion





Method



TABLE 1



FIGURE 2


CONSTRUAL (STUDY 1)

04

05

06

07

08


ice-

qual

ity ju

dgm

ents

Low PDB High PDB




Results






FIGURE 3



354

455

556

657



American Indian

p lt 05

p lt 001

TABLE 2




TABLE 3









Discussion






Method










FIGURE 4






Results






FIGURE 5



49

51

53

55

57

59

61

63

65

67



Qua

lity

judg

men

ts


p gt 16 p gt 77 p lt 05

p lt 001

p lt 05 p gt 29

p gt 15 p gt 70

p lt 05














Discussion






GENERAL DISCUSSION




























REFERENCES




















































































Results


Discussion





Method



TABLE 1



FIGURE 2


CONSTRUAL (STUDY 1)

04

05

06

07

08


ice-

qual

ity ju

dgm

ents

Low PDB High PDB




Results






FIGURE 3



354

455

556

657



American Indian

p lt 05

p lt 001

TABLE 2




TABLE 3









Discussion






Method










FIGURE 4






Results






FIGURE 5



49

51

53

55

57

59

61

63

65

67



Qua

lity

judg

men

ts


p gt 16 p gt 77 p lt 05

p lt 001

p lt 05 p gt 29

p gt 15 p gt 70

p lt 05














Discussion






GENERAL DISCUSSION




























REFERENCES





















































































Results






FIGURE 3



354

455

556

657



American Indian

p lt 05

p lt 001

TABLE 2




TABLE 3









Discussion






Method










FIGURE 4






Results






FIGURE 5



49

51

53

55

57

59

61

63

65

67



Qua

lity

judg

men

ts


p gt 16 p gt 77 p lt 05

p lt 001

p lt 05 p gt 29

p gt 15 p gt 70

p lt 05














Discussion






GENERAL DISCUSSION




























REFERENCES





















































































Discussion






Method










FIGURE 4






Results






FIGURE 5



49

51

53

55

57

59

61

63

65

67



Qua

lity

judg

men

ts


p gt 16 p gt 77 p lt 05

p lt 001

p lt 05 p gt 29

p gt 15 p gt 70

p lt 05














Discussion






GENERAL DISCUSSION




























REFERENCES























































































FIGURE 4






Results






FIGURE 5



49

51

53

55

57

59

61

63

65

67



Qua

lity

judg

men

ts


p gt 16 p gt 77 p lt 05

p lt 001

p lt 05 p gt 29

p gt 15 p gt 70

p lt 05














Discussion






GENERAL DISCUSSION




























REFERENCES






















































































Results






FIGURE 5



49

51

53

55

57

59

61

63

65

67



Qua

lity

judg

men

ts


p gt 16 p gt 77 p lt 05

p lt 001

p lt 05 p gt 29

p gt 15 p gt 70

p lt 05














Discussion






GENERAL DISCUSSION




























REFERENCES




























































































Discussion






GENERAL DISCUSSION




























REFERENCES





















































































GENERAL DISCUSSION




























REFERENCES






































































































REFERENCES



















































































Does a Dollar Get You a Dollar’s Worth of Merchandise? … underexplored cultural dimension,...

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Transcript of Does a Dollar Get You a Dollar’s Worth of Merchandise? … underexplored cultural dimension,...