When Opposites Detract: Categorical Reasoning and Subtractive Valuations of Product Combinations

Abstract

Can pairing items from different price tiers decrease consumers’ perceptions of monetary value? Prior research suggests that adding an item with positive utility to an offering can only increase the offering’s overall value. In contrast, we show that combining expensive and inexpensive items can lead to subtractive rather than additive judgments, such that consumers are willing to pay less for the combination than for the expensive item alone. We attribute this subtraction effect to the categorical nature of consumers’ processing of numeric information when evaluating combinations of items classified into opposing categories. Five empirical studies lend converging support to the proposition that categorical reasoning can lead to subtractive judgments.