Expectancy confirmation in spite of disconfirming evidence: The case of price increases due to the introduction of the Euro

By Eva Traut-Mattausch, S. Schulz-Hardt, Tobias Greitemeyer, Dieter Frey. 2004

125 citations recorded by the source corpus.

People in Germany overwhelmingly believe that the Euro introduction caused an overall price increase, however, no such increase actually took place. To investigate whether this disparity could be based on biased perceptions of the average price trend, four studies were conducted. Participants received two menus from a restaurant (one ‘old’ menu with German Mark (DM) prices and one ‘new’ menu with Euro prices) and were asked to estimate the price trend (in per cent). In all of these studies, price trend judgements were biased towards rising prices. If the prices had in fact been raised, the magnitude of this price increase was overestimated. If the prices had remained stable, significant price increases were perceived. And if the prices had fallen, they were perceived as having remained stable. The bias was systematically related to participants' expectations concerning price increases. A ‘selective outcome correction’ hypothesis proved to best fit the data: incorrect calculation outcomes that are in line with one's expectations are overlooked, whereas incorrect inconsistent outcomes are detected and corrected. The results imply that expectations can influence judgements even when clear disconfirming evidence is available that can be compared with an objective standard, thus leaving no room for interpretation. Copyright © 2004 John Wiley & Sons, Ltd.

Subfields: General Decision Sciences, Marketing

View Paper: https://www.semanticscholar.org/paper/d7d8fe1457e076e1d84fadeba814bdb8c19ce4b2

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Citations in the corpus

• Unpacking the halo effect: reputation and crisis management (2006, background): “Research suggests people are reluctant to revise initial expectations even when confronted with clear disconfirming evidence ( Traut-Mattausch et al. , 2004”
• What's Behind "Inflation Perceptions"? A Survey-Based Analysis of Italian Consumers (2008, background): “In the case of the changeover to the euro, Traut-Mattausch et al. (2004) have found that the more pessimistic the individuals’ expectations, the more they tended to overestimate the changeover’s inflationary effects.”
• Memory for prices and the euro cash changeover: An analysis for cinema prices in Italy (2007, background): “…the results of the consumer surveys conducted before the changeover (European Commission 2001), according to which the expectation of strong price increases was less common in Italy than in other euro-area countries, in particular Germany (the country considered by Traut-Mattausch et al. 2004).”
• Did Prices Really Soar After the Euro Cash Changeover? Evidence from ATM Withdrawals (2012, background): “The flow of cash withdrawn from ATMs in Italy, the number of ATM cards, the number of POS and ATM terminals, and the interest rate on checking accounts are provided to the Bank of Italy by the banking system for supervisory reasons.”
• A Burden of Responsibility: The Role of Social Approval at the Onset of a Crisis (2014, background): “This confirmation bias restricts evaluators’ attention to confirming information, causing them to ignore or resist disconfirming information (Traut-Mattausch et al., 2004).”