Search

As customers increasingly rely on online reviews for making consumption decisions, the dangers arising from misinformation and fakery have become an acute source of concern for consumers, firms, and society at large. Many online review platforms claim a role as guardians of trust in the information exchange process. Yet, little is known about the practices firms can utilize to design platforms that build and safeguard consumer trust. The authors draw on governance and identity disclosure literature streams to propose five practices that mitigate fakery and build trust in the platform: monitoring, exposure, community building, status endowment, and identity disclosure. Five studies (1) establish the individual and joint effects these practices have on platform trust, (2) identify the mediating processes by which the practices build trust, (3) verify the ecological value of the conceptual framework, (4) provide support of the salience of the practices, and (5) show how the practices build trust above and beyond review content–level characteristics. Interaction effects suggest that exposure, community building, and status endowment obviate the need for identity disclosure in building platform trust, a finding that mitigates related privacy concerns. Collectively, the findings can improve platform design, enabling review platforms to fulfill their promise of mitigating fakery and increasing trust. [ABSTRACT FROM AUTHOR]

Are reviews with photos more helpful? If so, do consumers find reviews more helpful when photos and text convey similar or different information? This article examines the effect of content similarity between photos and text on review helpfulness and its underlying mechanism. Using a data set of 7.4 million reviews associated with 3.5 million photos from Yelp, and applying machine learning algorithms, the authors quantify the similarity of the content between text and photos. They find that, overall, photos increase the helpfulness of a review. More importantly, though, greater similarity between photos and text heightens review helpfulness more. The authors then validate algorithm-based similarity assessments with similarity perceptions of human judges. Using real-world reviews from Yelp and carefully designed stimuli, they replicate the core findings in five laboratory experiments. Further, testing the underlying mechanism, they find that greater similarity facilitates the ease with which consumers can process the review, which, in turn, increases that review's helpfulness to consumers. Finally, they show that factors that impede the ease of processing (e.g., language difficulty or poor image quality) can reduce the effect of similarity on helpfulness. These findings provide novel insights into the value of user-generated content that includes text and photos and its underlying mechanism. [ABSTRACT FROM AUTHOR]

Standard choice-based conjoint models often ignore or insufficiently approximate consumers' budget constraints, despite the prominent role of budget constraints in economic theory. The authors offer a theoretically motivated improvement to the choice-based conjoint model that is especially appropriate for high-ticket durable goods and develop a Bayesian method for the inference of unobserved budget constraints. The proposed method leverages respondents' stated budget constraints that suffer from measurement error and respondents' financial demographic variables as additional information to reduce the dependency on functional form assumptions in the estimation. The authors show that accounting for budget constraints substantially increases model fit and the accuracy of competitive pricing in an industry-grade discrete-choice experiment on consumer preferences for high-end laptops. The proposed model performs better than the canonical linear price benchmark model, which is not flexible enough to approximate budget constraints. In theory, more flexible utility specifications, such as the nonlinear dummy price model, can approximate consumers' budget constraints. However, they perform poorly when only finite data are available. The authors conclude that applied researchers in industry and academia will benefit from having a better tool for estimating budgets in high-ticket categories. [ABSTRACT FROM AUTHOR]

The authors develop an attribute-based mixed-membership model of consumers' preference for stockkeeping units in store assortments. The model represents the underlying "topics of interest" that drive shopping behaviors as probability distributions over product attributes. It overcomes several limitations of latent Dirichlet allocation topic models and is particularly useful for making preference predictions in large and frequently changing store assortments. The authors apply the proposed model to investigate topics driving browsing and purchase activities in an online deal marketplace of fashion products and explore how preference structures evolve over time. They find commonalities and differences in the topics that drive the browsing and purchase stages of online shopping processes. In general, browsing covers a broader range of product attributes than purchases. Consumers tend to browse products of premium positioning and/or deep discounts in the deal marketplace, but when purchasing, they tend to gravitate toward lower-tiered products at their original prices and modest depths of discounts. The authors illustrate how insights from the proposed model can be utilized to profile consumers based on their price preferences and to improve personalized product recommendations. They show that the model's performance is particularly strong in predicting preferences for new products that are not in the existing assortment. [ABSTRACT FROM AUTHOR]

Consumers frequently exchange their private personal data with companies in return for goods and services, such as access to search results or social networks. The authors provide a normative criterion to help assess whether companies compensate consumers adequately for their private data in these exchanges. Across a series of 11 experiments, they find that individuals place a higher price on their private data when they sell them for money than when they barter them for goods. In an application of the compatibility principle in cognitive psychology, the authors also find in two additional experiments that this effect occurs because money is a more compatible medium for valuing private data than goods are, which increases the weight of the data in monetary valuations, raising the prices that participants demand for their private data in money compared with goods. This discrepancy in valuations constitutes a violation of procedure invariance and amounts to an intransitivity of participants' preferences for privacy. The findings raise the question of whether companies are compensating consumers adequately for their data and whether the ubiquitous markets for privacy function efficiently. Accordingly, the authors point to a possible consumer welfare argument for antitrust regulation of technology companies. [ABSTRACT FROM AUTHOR]

Companies vary on oft-publicized size metrics (number of employees, revenue). Do consumers prefer otherwise identical products made by larger or smaller companies? The answer hinges on whether consumers perceive the products as low-tech or high-tech. This prediction stems from a novel framework charting two lay theories regarding key resources companies utilize to provide value to consumers: employees and finances. In the intrinsic motivation lay theory, consumers believe that employees of larger (vs. smaller) companies are less intrinsically motivated. In the financial resources lay theory, consumers believe that larger (vs. smaller) companies have greater capacity to fund research and development. Critically, product type (low-tech vs. high-tech) differentially affects the accessibility of these two lay theories: For low-tech (vs. high-tech) products, the intrinsic motivation lay theory is more accessible, driving quality evaluations and choice in favor of smaller companies. For high-tech (vs. low-tech) products, the financial resources lay theory is more accessible, driving quality evaluations and choice in favor of larger companies. This research advances theory by reconciling conflicting findings regarding product quality inferences from company size metrics, with guidance for marketers to improve quality evaluations and choice shares by strategically supporting or challenging lay theories and shifting perceptions of company size or product type. [ABSTRACT FROM AUTHOR]

One of the most dramatic shifts in recent years has been consumers' increased use of smartphones for making purchases and choices—but does using a smartphone influence what consumers choose? This article shows that, compared with using a personal computer (PC), making choices using a personal smartphone leads consumers to prefer more unique options. The authors theorize that because smartphones are considerably more personal and private than PCs, using them activates intimate self-knowledge and increases private self-focus, shifting attention toward individuating personal preferences, feelings, and inner states. Consequently, making choices using a personal smartphone, compared with a PC, tends to increase the preference for unique and self-expressive options. Six experiments and several replications examine the effects of personal smartphone use on the preference for unique options and test the underlying role of private self-focus. The findings have important implications for theories of self-focus, uniqueness seeking, and technology's impact on consumers, as well as tangible implications for many online vendors, brands, and researchers who use mobile devices to interact with their respective audiences. [ABSTRACT FROM AUTHOR]

Market structure maps spatially represent competitive relationships among brands and products. In these maps, each product is typically visualized in a single map location. Such visualization, however, does not adequately accommodate multimarket membership products (MMPs), which are products that compete in multiple submarkets that are each characterized by distinct competitors and consumer preferences. The author proposes a novel framework that accommodates MMPs by visualizing products in the local context of each submarket in which they compete. This framework is then used to study market structure in the digital camera market. Competitive relationships are inferred from consumers' online searches using bootstrapped neural product embedding. The research shows that 8% of cameras are MMPs and that 50% of all submarkets are affected by MMPs. The map generated with the proposed framework uncovers mismatches between manufacturer positioning and consumer perception of several cameras. An extensive comparison of the proposed framework with alternative mapping methods reveals that (1) commonly used mapping methods misrepresent MMPs' competitive positions in their maps and (2) ignoring MMPs can lead to distorted visualizations of the underlying market structure. Both problems compromise firms' abilities to accurately assess products' competitive positions and evaluate the effectiveness of their positioning strategies. [ABSTRACT FROM AUTHOR]

The conventional discrete-choice model of demand assumes that consumers are fully informed about every available product alternative. This assumption is at odds with the large body of literature studying incomplete information and the role of the consumer's "evoked set" or "consideration set." The author develops a novel empirical discrete-choice demand model derived from an underlying theory of consumers' rational inattention. The model distinguishes between factors that shift demand through the utility function, such as prices and product attributes, and factors that shift demand through the consumer's information "evaluation costs." The author conducts an empirical case study of the laundry detergent category. Using a set of exclusion restrictions based on retail promotional instruments, specification tests select the rational inattention model over the conventional full-information discrete-choice model. Exploiting the launch of Tide Pods midway through the sample, the author demonstrates the role of evaluation costs for the measured value creation from a new product. A conventional discrete-choice model always assigns positive incremental consumer value from new products. However, the rational inattention model developed herein finds a decrease in overall consumer welfare from the new Tide Pods' entry, with the increased friction in information associated with the larger choice set offsetting the potential gains from higher match value. [ABSTRACT FROM AUTHOR]

In many joint consumption decisions, such as choosing a restaurant or a movie to watch together, one party often communicates to the other that they do not have a particular preference among the options (e.g., "I have no preference," "I'm fine with any option"). Despite their prevalence, little is known about how communications of no preference impact joint decision making and the consumption experience. Do consumers take the other party's indifference at face value? Does the decision become easier to make without one party's preference to incorporate? How will such communications ultimately impact consumption and social utility? In a series of six studies using both hypothetical and real joint consumption decisions, the authors find that recipients of no-preference communication infer that the co-consumer (i.e., the person communicating having no preferences) actually does have preferences but is not disclosing them. These perceptions of undisclosed preferences increase the decision makers' decision difficulty and cause them to like the co-consumer less. Further, the authors find that the decision maker intuits that the co-consumer's (undisclosed) preferences are probably dissimilar to their own, which leads them to choose an option they like less and ultimately decreases their enjoyment. Interestingly, these negative effects are not anticipated by the party who communicates having no preference. [ABSTRACT FROM AUTHOR]

This article explores how consumers' relative spatial location influences their preferences and choices. Drawing on the conceptual metaphor literature, the author proposes that people interpret the abstract concept of risk using a more tangible concept: their location relative to the center or edge of a space. Five main studies (and a pilot) reveal the existence of a metaphorical association between risk and spatial location and show how this association systematically affects consumer risk-taking behavior. Specifically, people positioned closer to the edges (vs. center) of space are disproportionately more likely to seek (vs. avoid) risky choices. This phenomenon is demonstrated across various decision-making scenarios in the laboratory and field, using both physical and virtual manipulations of space. This effect occurs because being located closer to the edges (vs. center) evokes concepts related to risk (vs. safety), making risky (vs. safe) products easier to process and, as a result, more desirable. Moreover, this research sheds light on the effect characteristics and boundary conditions. The author concludes with a discussion of the implications of these findings for consumers and businesses. [ABSTRACT FROM AUTHOR]

Consumers often try to achieve multiple goals when purchasing products and services, where choices are sought that maximize utility and other objectives such as to minimize regret. If the performance of choice outcomes are associated with high level of uncertainty at the time of purchase, consumers worry that the alternative of interest may turn out to be not optimal, an outcome they want to avoid when making a purchase. The authors propose a new regret function and explore its properties. Then, they propose a generalized framework of multiple goal pursuit and apply it to a utility maximization and regret minimization problem. Pareto-optimal sets are an outcome of multiple goal optimization problems where there are multiple alternatives that are nondominated. The proposed framework enables the authors to generalize a dual-goal problem as a constrained optimization problem where either utility is maximized subject to the constraint on regret or regret is minimized subject to the utility constraint. The proposed model fits the data better, provides improved predictions, and offers a tractable solution to a problem of utility maximization and regret minimization. [ABSTRACT FROM AUTHOR]

This research examines the interaction effect of two dimensions of preference on social contagion: preference similarity between a consumer (i.e., who seeks recommendation) and a peer (i.e., who potentially provides recommendation) and the fit of an experience good with the consumer's preference. For empirical analyses, the authors collected rich information from Last.fm, a music social networking website, including individual users' music play histories, friendship information, social tags (i.e., user-generated keywords associated with artists and songs), and new song profiles. The results show that consumers' trial of a song that fits less with their preference is influenced more by peers with similar preferences. By contrast, consumers' trial of a song that fits more with their preference is influenced more by peers with dissimilar preferences. This research enriches the understanding of the nuanced role of preference in social contagion and offers managerial implications to better leverage social dynamics. [ABSTRACT FROM AUTHOR]

In today's advanced economies, consumers are constantly exposed to an increasing number of upgraded products. This research examines consumer response to a brand's launching of an upgraded product and identifies the consumer's ownership status of a previous version of the product as a key dimension that can influence their reaction. Contrary to common intuition, the research demonstrates that while the release of an upgraded product is received positively by nonowners of a previous version, this is not always the case for owners. The authors propose that owners respond unfavorably because the new upgrade increases perceived distance between the owners and the brand as the brand progresses forward with the enhanced products. That is, when the new product replaces an existing product the consumers own, consumers perceive that the brand is moving away from them. This negative effect of an upgrade is attenuated if the owners are provided with an extra source of connection to the brand. The authors investigate this phenomenon in five studies and discuss the implications of their findings. [ABSTRACT FROM AUTHOR]

Durable goods often come bundled with limited-time and sometimes generous factory/base warranties. Yet, for many durable goods, customers purchase extended warranties against which they rarely make claims. This study offers a reference-dependent-preferences-based theoretical explanation for why consumers purchase extended warranties even if their purchased good is already covered by a base warranty. The authors show that consumers treat base warranties as a reference point, thereby creating a qualitative difference in the valuation of an extended warranty on the purchased product. The proposed theory model is validated using observational data from the automobile industry and shows how the reference-dependent-preferences-based effect varies with vehicle quality and macroeconomic conditions. The analyses reveal auto buyers' elevated loss-aversion motivations and higher price sensitivity during weaker macroeconomic conditions than during more robust macroeconomic conditions. Finally, the authors use the empirical model to identify opportunities for auto dealers to engage in targeted price promotions as a function of prevailing macroeconomic conditions. These findings have important implications for marketing managers, as they provide valuable guidance on when an extended warranty should be promoted, to whom it should be promoted, and which extended warranty should be marketed. [ABSTRACT FROM AUTHOR]

Many consumers engage in frequent consumption indulgences. Because such indulgences accumulate resource costs (e.g., money, calories), consumers are often prompted to cut back, posing questions for how to design cutback programs with consumer appeal. This research distinguishes between frequent indulgences that consumers think of as social (vs. solitary), demonstrating that thinking of an indulgence as social (vs. solitary) decreases preferences to cut "frequency" (how often the indulgence occasion occurs) and increases preferences to cut "intensity" (choosing a within-category substitute that involves lower resource expenditure). The author explains these effects by differentiating between enjoyment from the product itself and enjoyment from aspects outside the product. Thinking of an indulgence as social (vs. solitary) heightens people's anticipated enjoyment, particularly for aspects outside of the product, decreasing interest in cutting the number of occasions (cutting frequency) and increasing interest in cutting back on the product itself via a within-category substitute (cutting intensity). This divergence in cutback preferences for social (vs. solitary) experiences is thus eliminated (1) when consumers think of social experiences with distant (vs. close) others, which involve lower enjoyment outside of the product, or (2) when solitary experiences primarily involve heightened enjoyment for aspects outside of the product. [ABSTRACT FROM AUTHOR]

Consumers often become "stuck in a rabbit hole" when consuming media. They may watch several YouTube videos in the same category or view several thematically similar artistic images on Instagram in a row, finding it difficult to stop. What causes individuals to choose to consume additional media on a topic that is similar to (vs. different from) what they just experienced? The authors examine a novel antecedent: the consecutive consumption of multiple similar media. After viewing multiple similar media consecutively, more consumers choose to (1) view additional similar media over dissimilar media or (2) complete a dissimilar activity entirely, even when the prior consumption pattern is externally induced. The rabbit hole effect occurs because of increased accessibility of the shared category: when a category is more accessible, people feel immersed in it and anticipate that future options within that category will be more enjoyable. The authors identify three characteristics of media consumption that contribute to the rabbit hole effect by increasing category accessibility: similarity, repetition, and consecutiveness of prior media consumption. This research contributes to literature on technology, choice, and variety seeking, and it offers implications for increasing (vs. slowing) similar consumption. [ABSTRACT FROM AUTHOR]

Given the increasing importance of the global sharing economy, consumers face the decision of whether to choose an access-based option versus an owned option. However, understanding of how consumers' global–local identity may influence their preference for access-based consumption is rather limited. The authors fill this knowledge gap by proposing that consumers high in global identity ("globals") have a greater preference for access-based consumption than those high in local identity ("locals"). Such effects are mediated by consumers' consumption openness. Consistent with the "consumption openness" account, the authors find that when the desire for openness is enhanced by a contextual cue, locals' preference for access-based consumption is elevated, whereas globals' preference for access-based consumption is unaffected. However, when the desire for openness is suppressed by a contextual cue, globals' preference for access-based consumption is reduced, whereas locals' preference for access-based consumption is unaffected. Similarly, consumers' traveler–settler orientation sets a boundary for the relationship between global–local identity and preference for access-based consumption, given its close association with consumption openness. Theoretical and managerial implications are discussed. [ABSTRACT FROM AUTHOR]

The proliferation of digital goods has led to an increased interest in how the digitization of products and services affects consumer behavior. In this article, the authors show that although consumers are willing to pay more for physical than digital goods, this difference attenuates—and even reverses—when consumers are asked to make a choice between the two product formats. This effect is explained by a contingent weighting principle: In willingness to pay, a quantitative task, consumers anchor on quantitative information (e.g., market beliefs). However, in choice, a qualitative task, consumers anchor on qualitative information (e.g., which good dominates on the most important attribute). These differences in contingent weighting result in physical goods being preferred in willingness to pay, but their digital equivalent being preferred relatively more in choice. The authors draw conclusions from ten preregistered experiments and six supplemental studies using a variety of goods in hypothetical and incentive-compatible contexts, as well as within- and between-subjects designs. The article concludes with a discussion of implications for the marketing of digital goods. [ABSTRACT FROM AUTHOR]

Consumers' choices about health products are heavily influenced by public information, such as news articles, research articles, online customer reviews, online product discussion, and TV shows. Dr. Oz, a celebrity physician, often makes medical recommendations with limited or marginal scientific evidence. Although reputable news agencies have traditionally acted as gatekeepers of reliable information, they face the intense pressure of "the eyeball game." Customer reviews, despite their authenticity, may come from deceived consumers. Therefore, it remains unclear whether public information sources can correct the misleading health information. In the context of over-the-counter weight loss products, the authors carefully analyze the cascading of information post endorsement. The analysis of extensive textual content with deep-learning methods reveals that legitimate news outlets respond to Dr. Oz's endorsement by generating more news articles about the ingredient; on average, articles after the endorsement contain higher sentiment, so news agencies seem to amplify rather than rectify the misleading endorsement. The finding highlights a serious concern: the risk of hype news diffusion. Research articles react too slowly to mitigate the problem, and online customer reviews and product discussions provide only marginal corrections. The findings underscore the importance of oversight to mitigate the risk of cascading hype news. [ABSTRACT FROM AUTHOR]

Marketization—the entry of the market logic into a field originally insulated from it—is a transformative force that has reshaped many fields, including education, health care, the arts, and religion. Marketization brings a unique set of challenges for established organizations: it opens a field to market-style mechanisms of consumer choice and competition, which undermines the legitimacy of established organizations, and it creates contradictory demands for organizational actions. How can established organizations adapt to marketization? To answer this question, the authors study the adaptation of five established religious schools to the marketization of education in Brazil. They develop the novel hybridization strategy of nested coupling and explain that established organizations respond to marketization by balancing competing demands for differentiation and conformity. The authors show how religious schools nest the market logic within the religious logic by reconfiguring their resources to conform to market demands while differentiating themselves through their religious orientation. Nested coupling provides a novel strategic approach for established organizations in marketized or marketizing fields, such as hospitals, museums, and schools, to capitalize on a logic that preexists marketization and to create a unique competitive positioning in the market. [ABSTRACT FROM AUTHOR]

Despite marketers' efforts to make consumers feel attractive in many sales and advertising contexts, little is known about how consumers' self-perceived physical attractiveness influences their decision making. The authors examine whether a boost in consumers' self-perceived attractiveness influences subsequent choices in domains unrelated to beauty. Across six studies, the authors find converging evidence that a boost in consumers' self-perceived attractiveness enhances their general self-confidence and reduces preference uncertainty, resulting in less reliance on the choice context and thus fewer choices of compromise, all-average, and default options. The findings further show that consumers use self-confidence as metacognitive information for inferring preference uncertainty in subsequent decisions. This process is a misattribution that can be attenuated when consumers attribute their self-confidence to the self-perceived attractiveness. The article concludes with a discussion of theoretical and managerial implications. [ABSTRACT FROM AUTHOR]

The success of customer relationship management programs ultimately depends on the firm's ability to identify and leverage differences across customers—a difficult task when firms attempt to manage new customers, for whom only the first purchase has been observed. The lack of repeated observations for these customers poses a structural challenge for firms to infer unobserved differences across them. This is what the authors call the "cold start" problem of customer relationship management, whereby companies have difficulties leveraging existing data when they attempt to make inferences about customers at the beginning of their relationship. The authors propose a solution to the cold start problem by developing a probabilistic machine learning modeling framework that leverages the information collected at the moment of acquisition. The main aspect of the model is that it flexibly captures latent dimensions that govern the behaviors observed at acquisition as well as future propensities to buy and to respond to marketing actions using deep exponential families. The model can be integrated with a variety of demand specifications and is flexible enough to capture a wide range of heterogeneity structures. The authors validate their approach in a retail context and empirically demonstrate the model's ability to identify high-value customers as well as those most sensitive to marketing actions right after their first purchase. [ABSTRACT FROM AUTHOR]

In an effort to combat food waste, many firms have introduced rescue-based foods (RBFs), which are made from ingredients that are safe to eat but would otherwise be wasted, often due to aesthetic issues or oversupply. Although the benefits of RBF are varied, some firms adopt strategies that highlight RBF's waste-reduction benefits, such as reduced landfill use or lower environmental impact. This research posits that when firms adopt strategies that highlight associations between physical waste and RBF, those associations can generate negative mental imagery, which can trigger disgust and mitigate positive consumer attitudes toward RBF. When such associations are not present, demand is consistent with demand for conventional foods. The authors find support for the role of mental imagery in this demand mitigation process, with some promotional appeals stimulating thoughts of physical waste. Counterintuitively, this research reveals that when marketers adopt the common practice of using environmental benefit appeals that can trigger physical waste associations, such as the color green, consumer demand for RBF diminishes. Conversely, focusing on the societal benefits or limiting the number of cues available to create physical waste associations generates consumer demand for these foods on a level equivalent to that of conventional food. [ABSTRACT FROM AUTHOR]

Consumption of used products has the potential to symbolically connect present and previous users of these products, something that may appeal to lonely consumers. Accordingly, across seven studies, feeling lonely increased consumers' preference for previously owned products. Specifically, the authors found that the proportion of lone shoppers was higher in a used versus a regular bookstore, lone individuals (vs. those sitting in pairs) were more likely to select a used over a new product, people without (vs. with) a date on Valentine's Day expressed stronger preference for used products, and individual differences in loneliness during the COVID-19 pandemic predicted interest in used products. Other studies documented that the desire to symbolically connect underlies the effect of loneliness on consumption. At a time when loneliness is on the rise, the authors discuss implications for the marketing of used products and how loneliness might motivate consumers to reduce waste. [ABSTRACT FROM AUTHOR]

Crowdfunding has emerged as an alternative means of financing new ventures by utilizing the financial support of a large group of individual investors. This research asks a novel question: Does being crowdfunded carry any signal value for the broader market of observing consumers? Seven studies reveal a consumer preference for crowdfunded products, even after controlling for a product's objective product characteristics. The authors identify two inferences that help explain this effect: (1) consumers perceive crowdfunded products to be of higher quality, and (2) they believe that supporting crowdfunding reduces inequality in the marketplace. The authors further document an important boundary condition of the first inference: the identified effect reverses in high-risk domains (e.g., products that involve high physical risk) due to consumer perceptions that the crowdfunding model lacks sufficient professionalism to mitigate risk. With regard to the second inference, the authors find that the positive crowdfunding effect is particularly strong among consumers who value social equality. Taken together, this work sheds new light on consumer perceptions of crowdfunding, elucidates why and when consumers prefer crowdfunded products, and offers actionable implications for managers. [ABSTRACT FROM AUTHOR]

The authors revisit the question of alcohol consumption and public health over business cycles by decomposing overall alcohol consumption into drinking frequency and intensity in relation to consumer heterogeneity. To study this question, they use consumer-level panel data on the reported consumption (not purchases) of beer, which is the most heavily consumed alcoholic beverage and accounts for the majority of binge drinking in the United States. Leveraging the panel nature of the data, the authors find a negative (positive) relationship between unemployment and drinking frequency (intensity). Total consumption, which is the product of drinking frequency and intensity, is procyclical. To uncover differences in behavior across consumers and to provide policy recommendations at a segment level, the authors present a structural model where consumers simultaneously choose the frequency and intensity of their alcohol consumption. They find differences across consumers in their behaviors, notably with respect to income and age. They conduct policy simulations to compare the effectiveness of alcohol-related policies to counter the adverse effects of recessions on the health of vulnerable groups such as low-income and elderly populations. [ABSTRACT FROM AUTHOR]

This research explores how marketers can avoid the so-called "false consensus effect"—the egocentric tendency to project personal preferences onto consumers. Two pilot studies show that most marketers have a surprisingly strong lay intuition about the existence of this inference bias, admit that they are frequently affected by it, and try to avoid it when predicting consumer preferences. Moreover, the pilot studies indicate that most marketers use a very natural and straightforward approach to avoid the false consensus effect in practice, that is, they simply try to "suppress" (i.e., ignore) their personal preferences when predicting consumer preferences. Ironically, four subsequent studies show that this frequently used tactic can backfire and increase marketers' susceptibility to the false consensus effect. Specifically, the results suggest that these backfire effects are most likely to occur for marketers with a low level of preference certainty. In contrast, the results imply that preference suppression does not backfire but instead decreases the false consensus effect for marketers with a high level of preference certainty. Finally, the studies explore the mechanism behind these results and show how marketers can ultimately avoid the false consensus effect—regardless of their level of preference certainty and without risking backfire effects. [ABSTRACT FROM AUTHOR]

This research demonstrates that under states of certainty, consumers with a relatively stronger global (local) identity prefer global (local) brands, whereas under states of uncertainty, consumers with a relatively stronger global (local) identity prefer local (global) brands. This effect occurs because uncertainty (certainty) activates a divergent (convergent) thinking style, which results in a preference for options that are more distant from (closer to) the identity to which consumers associate more strongly. The effect holds both when individuals' global–local citizenship identity is measured and when it is manipulated. The research further establishes an important boundary condition for the effect. The effect holds in the citizenship identity context because people normally associate themselves with both local and global citizenship identities, and situational or dispositional factors only influence the degree to which they associate with each identity. The effect does not surface when individuals construe their local–global citizenship identities as interfering, meaning they conceive that holding one identity conflicts with holding the other. [ABSTRACT FROM AUTHOR]

Anecdotal evidence and extant research show that consumers can prefer both user-designed and designer-designed products. However, the factors that moderate such preferences are not well understood. The authors posit power distance belief (PDB) as a moderator such that low-PDB consumers prefer user-designed to designer-designed products because they identify more with user-driven companies. In contrast, high-PDB consumers prefer designer-designed to user-designed products due to their stronger trust in designer-driven companies. Six studies examining power distance belief at both the country and individual levels provide convergent support for the proposed moderating effect of PDB and underlying mechanisms. Furthermore, the authors demonstrate that the interaction between design philosophy and PDB is more likely for low-complexity than high-complexity products. [ABSTRACT FROM AUTHOR]

Using one field and two online lab experiments, this article shows that congruency between shelf layout and a consumer's internal product categorization increases the perceived variety of the assortment and reduces the perceived complexity of the shelf layout. These assortment perceptions, in turn, heighten purchase intention and satisfaction toward the chosen item. Results are robust across internal categorization measurements (planogram design vs. sorting tasks), congruency measures (distance- vs. matching-based), and products (biscuits vs. yogurt snacks). In the field study, familiarity—operationalized as either consumption frequency or subjective product knowledge—increased the overall effect of categorization congruency and strengthened its pathway through perceived variety (vs. the one through complexity). The authors show how their research can be exploited to improve shelf layouts by optimizing the external categorization. They demonstrate the value of a unifying Bayesian framework for research on behavioral decision making that uses the same set of posterior parameter draws for parameter inference, moderated mediation analysis, and optimization under uncertainty. [ABSTRACT FROM AUTHOR]

This research examines the impact of defaults on product choice in sequential-decision settings. Whereas prior research has shown that a default can affect what consumers purchase by promoting choice of the preselected option, the influence of defaults is more nuanced when consumers make a series of related choices. In such a setting, consumer preferences may evolve across choices due to "spillover" effects from one choice to subsequent choices. The authors hypothesize that defaults systematically attenuate choice spillover effects because accepting a default is a more passive process than either choosing a nondefault option in the presence of a default or making a choice in the absence of a default. Three experiments and a field study provide compelling evidence for such default-induced changes in choice spillover effects. The findings show that firms' setting of high-price defaults with the aim of influencing consumers to choose more expensive products can backfire through the attenuation of spillover. In addition to advancing the understanding of the interplay between defaults and preference dynamics, insights from this research have important practical implications for firms applying defaults in sequential choices. [ABSTRACT FROM AUTHOR]

This research introduces a framework wherein consumers take on "requestor" or "responder" roles in making joint consumption decisions. The authors document a robust preference expression asymmetry wherein "requestors" soliciting others' consumption preferences (e.g., "Where do you want to go for dinner?") desire preference expressions (e.g., "Let's go to this restaurant"), whereas "responders" instead do not express preferences (e.g., "Anywhere is fine with me"). This asymmetry generalizes under a broad set of situations and occurs because the requestor and responder roles differ in their foci. Compared to responders, requestors are more focused on mitigating the difficulty of arriving at a decision, whereas compared to requestors, responders are more focused on conveying likability by appearing easygoing. Responders thus behave suboptimally, incurring a "preference cost" (when masking preferences) and a "social friction cost" (requestors favor responders who express preferences). Requestors can elicit preference expression by conveying their own dislike of decision making, which increases responders' focus on mitigating decision difficulty. The authors conclude by discussing the framework's contributions to looking "under the hood" of joint consumption decisions. [ABSTRACT FROM AUTHOR]

This article proposes a measurement approach to determine how consumers prefer to locate themselves in proximity to others during consumption experiences, such as when they purchase reserved seating tickets to a performance. Applied to data from locational choice experiments that simulate reserved seating assortments, administered to more than 2,000 participants, this approach reveals the importance of modeling proximity to others when studying locational choices. It also emphasizes the degree to which consumers are heterogeneous in their preferences for proximity to both focal elements (e.g., stage, screen, aisles) and other consumers. Therefore, event operators should collect data beyond purchase ticket logs and also include consumers who did not purchase. Furthermore, this study illustrates how managers can use fitted, individual-level parameters and an optimization model to make more effective seat-level availability decisions. In addition to these recommendations for managers of reserved seating venues, this article offers novel contributions to research related to advance selling, spatial models, and personal space. [ABSTRACT FROM AUTHOR]

Previous research on the effects of celebrity endorsement has focused on the transfer of positive properties (likeableness, credibility, symbolic meanings, etc.) from the endorser to the product. Taking a different perspective, this study suggests that the way in which consumers evaluate an endorser (i.e., the cognitive process, such as applying family origin or achievement as the basis for evaluation) will carry over to the evaluation of the endorsed product (e.g., applying country of origin or performance as the criteria). Five experiments support this process-transfer account and show that it can be induced by subtle verbal/visual cues in advertisements. Because the process transfer is not inherently associated with positive/negative valence, it provides a theoretical rationale for explaining successful endorsements involving endorsers who are less favorable/credible, less of a "fit" with the product, or associated with some negative meanings, in addition to those involving positively or neutrally evaluated endorsers. The process-transfer model supplements existing models and provides a more comprehensive understanding of endorser effects. It provides marketers with a set of less stringent guidelines for selecting endorsers as well as valuable damage control tools for brands when an endorser screws up. [ABSTRACT FROM AUTHOR]

This research examines how the unsystematic (vs. systematic) spatial arrangement of a set of alternatives affects consumers' product choices. The key hypothesis is that an unsystematic product arrangement—in which an assortment consisting of several alternatives is arranged in an apparently arbitrary manner—causes greater perceptual disfluency, which in turn triggers more extensive exploratory product search, ultimately promoting the choice of unfamiliar products. This sequence of effects is particularly pronounced when consumers do not have a strong prior preference for specific alternatives in the assortment. Evidence from five studies, including a large-scale field experiment, provides support for this theorizing across various display formats and product domains. The findings advance our understanding of how the spatial arrangement of a product assortment influences consumer choice, and they shed light on the psychological mechanism that governs this effect. [ABSTRACT FROM AUTHOR]

For many consumer goods, the visual appearance is a vital determinant of market success. Although there is an emerging literature on how objective design characteristics drive consumer preferences, this literature has not yet taken into account that product design happens in the context of a brand's equity. This research addresses the question of how to leverage brand equity when designing the visual appearance of a product. Specifically, it investigates the role of two key strategic visual design decisions: brand typicality (similarity within the brand's range) and segment typicality (similarity to the competitive set). Drawing on fluency theory, the authors argue that high-equity brands benefit more from brand typicality but less from segment typicality than low-equity brands. Using data from the U.S. car market tracking market shares of 456 car models of 39 major brands operating in seven market segments across 13 years, the study provides empirical evidence for this conjecture and, thereby, implications for strategic product design and visual design theory. [ABSTRACT FROM AUTHOR]

Prior research on the use of scent in advertising has shown that scent can enhance the memorability of and engagement with an ad. However, can scenting an ad also change the way consumers perceive and react to the advertised product? This research provides new insights for this question and demonstrates an additional facet of scent: its ability to physically represent the essence of a target product and thus induce a sense of proximity. Through six studies, the authors show that scented ads enhance consumers' sense of proximity of the advertised product and consequently increase product appeal. In line with the proposed visceral nature of the effect, this effect holds even for unpleasant scents but is contingent on the scent's ability to represent the advertised product. The effect is weakened when the product is physically close. The findings of this research have implications for when and why firms should use scented ads. [ABSTRACT FROM AUTHOR]

Previous research has demonstrated that consumers evaluate products according to their perceived benefits when making a choice. This article extends prior work by proposing a method that evaluates the degree to which multiple a priori defined benefits mediate product choices. The model is the first to consider process heterogeneity—that is, heterogeneity in how consumers perceive multiple attributes to positively or negatively affect multiple benefits simultaneously and the contribution of each benefit to product utility. The authors propose discrete choice experiments to holistically measure the link between attributes and benefits, as well as between attributes and choice, resulting in data that can be analyzed with a generalized probit model. The approach contributes to mediation research by offering an alternative method of handling multiple multinomial mediators and dichotomous outcome variables. An empirical illustration of bread choices shows how consumer judgments about health and value perceptions of products mediate purchase decisions. The authors demonstrate how the method can help managers (1) confirm and test existing knowledge about latent benefits, including whether they explain all the variation in choice, and (2) consider process heterogeneity to inform market segmentation strategies. [ABSTRACT FROM AUTHOR]

Marketing research relies on individual-level estimates to understand the rich heterogeneity of consumers, firms, and products. While much of the literature focuses on capturing static cross-sectional heterogeneity, little research has been done on modeling dynamic heterogeneity, or the heterogeneous evolution of individual-level model parameters. In this work, the authors propose a novel framework for capturing the dynamics of heterogeneity, using individual-level, latent, Bayesian nonparametric Gaussian processes. Similar to standard heterogeneity specifications, this Gaussian process dynamic heterogeneity (GPDH) specification models individual-level parameters as flexible variations around population-level trends, allowing for sharing of statistical information both across individuals and within individuals over time. This hierarchical structure provides precise individual-level insights regarding parameter dynamics. The authors show that GPDH nests existing heterogeneity specifications and that not flexibly capturing individual-level dynamics may result in biased parameter estimates. Substantively, they apply GPDH to understand preference dynamics and to model the evolution of online reviews. Across both applications, they find robust evidence of dynamic heterogeneity and illustrate GPDH's rich managerial insights, with implications for targeting, pricing, and market structure analysis. [ABSTRACT FROM AUTHOR]

The authors propose a new conceptual basis for predicting when and why consumers match others' consumption choices. Specifically, they distinguish between ordinal ("ranked") versus nominal ("unranked") attributes and propose that consumers are more likely to match others on ordinal than on nominal attributes. Eleven studies involving a range of different ways of operationalizing ordinal versus nominal attributes collectively support this hypothesis. The authors' conceptualization helps resolve divergent findings in prior literature and provides guidance to managers on how to leverage information about prior customers' choices and employees' recommendations to shape and predict future customers' choices. Furthermore, the authors find process evidence that this effect is driven in part by consumers' beliefs that a failure to match on ordinal (but not nominal) attributes will lead to social discomfort for one or both parties. Although the primary focus is on food choices, the effects are also demonstrated in other domains, extending the generalizability of the findings and implications for managerial practice and theory. Finally, the conceptual framework offers additional paths for future research. [ABSTRACT FROM AUTHOR]

Previous research has shown that there exist "harbinger customers" who systematically purchase new products that fail (and are discontinued by retailers). This article extends this result in two ways. First, the findings document the existence of "harbinger zip codes." If households in these zip codes adopt a new product, this is a signal that the new product will fail. Second, a series of comparisons reveal that households in harbinger zip codes make other decisions that differ from other households. The first comparison identifies harbinger zip codes using purchases from one retailer and then evaluates purchases at a different retailer. Households in harbinger zip codes purchase products from the second retailer that other households are less likely to purchase. The analysis next compares donations to congressional election candidates; households in harbinger zip codes donate to different candidates than households in neighboring zip codes, and they donate to candidates who are less likely to win. House prices in harbinger zip codes also increase at slower rates than in neighboring zip codes. Investigation of households that change zip codes indicates that the harbinger zip code effect is more due to where customers choose to live, rather than households influencing their neighbors' tendencies. [ABSTRACT FROM AUTHOR]

Four experiments supported by six supplemental studies show that premium but higher-priced products (e.g., direct flights, larger-capacity data storage devices) are more popular when the additional cost is made explicit using differential price framing (DPF; e.g., "for $20 more") rather than being left implicit, as in standard inclusive price framing (IPF; e.g., "for $60 total"). The DPF effect is driven by pricing focalism: relative to IPF, DPF creates a focus on the price difference, which, because it is smaller than the total price, leads to lower perceived expensiveness and thus greater choice share for the premium option. This price framing effect is robust to displaying the total cost of the purchase, bad deals, and easy-to-compute price differences, and it appears to be uniquely effective in pricing contexts. However, DPF effects are reduced among consumers who adopt a slow and effortful decision process. These findings have implications for research on price partitioning, the design of effective pricing strategy, the sources of expensiveness perceptions in the marketplace, and consumer welfare. [ABSTRACT FROM AUTHOR]

Many service providers offer supplementary products related to their ongoing services (e.g., fitness centers offer fitness smartwatches). In seven studies, the authors show that the payment method for such supplementary products (multiple payments vs. a single lump sum) affects customers' tendency to defect from the provider's core service over time. Specifically, when customers pay for add-ons in multiple payments—provided that (1) they perceive the add-on as being bundled with the core service and (2) the payment period has an end point—they are initially less likely to defect from the service provider than when they pay in a single payment. Over time, however, as payments are made, this gap closes, such that defection intentions under the two payment methods eventually become similar. The authors propose that this phenomenon reflects "commitment projection," wherein a decrease in customers' commitment to the add-on product over time is projected onto their commitment to the service provider. These findings carry important managerial implications, given that many service providers offer add-on products in multiple-payment plans and that customers' defection decisions substantially affect firms' profitability. [ABSTRACT FROM AUTHOR]

Companies frequently allow customers to customize products by assembling different product features or ingredients. Whereas existing research has demonstrated that customers assign greater overall value to customized products, this research focuses on the effect of customization on customers' perceptions of specific product attributes (e.g., how healthy a product is). The findings of six studies—in the field, laboratory, and online—demonstrate that customizers and noncustomizers differ in their product perceptions even if the product is objectively the same. This is because customization leads customers to perceive the product in line with their own self-image (e.g., as an unhealthy eater), a phenomenon that the authors term "self-image-consistent product perceptions." Essentially, customization may influence product perceptions depending on the product and individuals' self-image; this can have downstream consequences on recommendations and social media communication. The authors test this theory for different product categories (clothing, food, and vacation packages) and attributes (fashionable, healthy, and adventurous) and demonstrate that framing customization as a simple choice or strengthening product positioning through labeling mitigates negative effects of customization. [ABSTRACT FROM AUTHOR]

The authors propose and empirically evaluate a new hybrid estimation approach that integrates choice-based conjoint with repeated purchase data for a dense consumer panel, and they show that it increases the accuracy of conjoint predictions for actual purchases observed months later. The key innovation lies in combining conjoint data with a long and detailed panel of actual choices for a random sample of the target population. By linking the actual purchase and conjoint data, researchers can estimate preferences for attributes not yet present in the marketplace, while also addressing many of the key limitations of conjoint analysis, including sample selection and contextual differences. Counterfactual product and pricing exercises illustrate the managerial relevance of the approach. [ABSTRACT FROM AUTHOR]

One of the traditional tenets of marketing is that managers considering whether to develop and launch a new product should adopt a customer orientation and consider whether the product would satisfy the needs of customers. This research discovers that adopting a customer orientation causes managers to experience undesirable cognitive effects. The authors find that when considering customers' needs during the screening phase of the new product development process, managers often voluntarily engage in mental imagery (i.e., cognitive simulation) that biases their evaluation of a new product idea toward unrealistic optimism—even for a flawed product that would not satisfy customer needs. Furthermore, the authors find that managers who exert greater vigilance to achieve more accurate evaluations of the new product idea are especially vulnerable to the biasing effect, leading to less accurate evaluations. The authors test an analytical technique (i.e., a theory-based approach to analyzing the new product) that successfully allows a manager to adopt a customer orientation without an attendant bias toward optimism. [ABSTRACT FROM AUTHOR]

Interactions between consumers and humanoid service robots (HSRs; i.e., robots with a human-like morphology such as a face, arms, and legs) will soon be part of routine marketplace experiences. It is unclear, however, whether these humanoid robots (compared with human employees) will trigger positive or negative consequences for consumers and companies. Seven experimental studies reveal that consumers display compensatory responses when they interact with an HSR rather than a human employee (e.g., they favor purchasing status goods, seek social affiliation, and order and eat more food). The authors investigate the underlying process driving these effects, and they find that HSRs elicit greater consumer discomfort (i.e., eeriness and a threat to human identity), which in turn results in the enhancement of compensatory consumption. Moreover, this research identifies boundary conditions of the effects such that the compensatory responses that HSRs elicit are (1) mitigated when consumer-perceived social belongingness is high, (2) attenuated when food is perceived as more healthful, and (3) buffered when the robot is machinized (rather than anthropomorphized). [ABSTRACT FROM AUTHOR]

Following subgoal success at a long-term goal, consumers can persist, behaving consistently with the long-term goal, or license, behaving consistently with competing shorter-term goals. The authors extend prior work by proposing that this choice is driven, in part, by chronic differences in consumers' cognitive and emotional responses to subgoal success. In Studies 1–5, they develop and validate a measure that captures these individual differences: the Persistence–Licensing Response Measure (PLRM). They demonstrate that the PLRM predicts persistence and licensing where existing constructs and measures do not, showing that consumers' responses to subgoal success represent a unique dimension of self-regulation. In Studies 6–10, the authors demonstrate that the PLRM moderates the effect of subgoal success on persistence and licensing behavior, revealing that the same subgoal success situation can lead to systematically different behaviors. The authors also examine how marketing interventions can be used to increase consumers' persistence following subgoal success. This work furthers the understanding of the determinants of persistence and licensing, improves prediction of behavior, and offers marketers tools to segment and target consumers, increasing persistence in key goal domains. [ABSTRACT FROM AUTHOR]

Although firms are increasingly launching branded mobile apps, an understanding of their influence on firm value remains elusive. Using stock market returns to assess firm value, the authors investigate the impact of branded mobile app announcements on such value. Moreover, recognizing that mobile apps generate various touchpoints in the customer journey, the authors also investigate how an app's design shifts the effects of mobile apps on firm value. In particular, they investigate effects from whether an app emphasizes features related to peer-to-peer interactions about the brand, personal-oriented interactions between a customer and the brand, or the purchase phase itself. They find that the launch of a mobile app increases firm value and that the features emphasized in app design play an important role in such value creation. The study offers important implications regarding the accountability of branded mobile apps and provides direction for marketing theory and practice. [ABSTRACT FROM AUTHOR]