The Role of Selective Information Processing in Price‐Quality Inference (original) (raw)
Related papers
A Selective Hypothesis Testing Perspective on Price-Quality Inference and Inference-Based Choice
Journal of Consumer Psychology, 2005
Consumers often rely heavily on price as a predictor of quality and typically overestimate the strength of this relation. Furthermore, the inferences of quality they make on the basis of price can influence their actual purchase decisions. Selective hypothesis testing appears to underlie the effects of information load and format on price-quality inferences. Results of 5 experiments converge on the conclusion that quality inferences are more heavily influenced by price when individuals have a high need for cognitive closure, when the amount of information presented is high (vs. low), and when the information presented is rank ordered in terms of quality rather than presented randomly. Furthermore, because consumers are willing to purchase more expensive brands when they perceive a high price-quality correlation, these variables can also influence their purchase decisions.
The Effects of Incomplete Information on Consumer Choice
Journal of Marketing Research, 2000
Two current trends, information overload combined with increased control of marketers (e.g., on the Internet) over the manner in which their products are sold and presented to buyers, suggest that deciding what information to provide or not to provide can determine a product's success in the marketplace. Although it has long been recognized that most purchase decisions are made with incomplete information, we still know very little about the effect of missing information on consumer choice. Building on earlier work by , we demonstrate that a tendency to give more weight to attributes on which all considered options have values ("common attributes"), relative to attributes for which not all options have values ("unique attributes"), can often lead to intransitive preferences. Using process measures, it is further shown that buyers tend to interpret missing attribute values in a way that supports the purchase of the option that is superior on the common attribute. The results indicate that information presentation format and inferences about missing values cannot account for the observed effects of missing information on consumer choice. We also show that the purchase decisions of buyers who consider attribute importance prior to making a choice and those with high need for cognition are less susceptible to influence by missing information. Finally, the findings indicate that choosing from sets with missing information can impact buyer tastes and purchase decisions made subsequently. We discuss the theoretical and practical implications of this research.
Consumer Inference: A Review of Processes, Bases, and Judgment Contexts
Journal of Consumer Psychology, 2004
Because products are rarely described completely, consumers often form inferences that go beyond the information given. We review research on the processes, bases, and the judgment contexts in which inferences are formed. The most basic processes are induction (inferences from specific instances to general principles) versus deduction (inferences from general principles to specific instances). Stimulus-based inferences are formed on-line (as information is encountered) using situationally available information, whereas memory-based (or theory-based) inferences are formed using prior knowledge and experience. Inferences can pertain to a single product judged in isolation (a singular judgment context) or to multiple products considered in relation to one another (a comparative judgment context). This 2 x 2 x 2 (Induction vs. Deduction x Stimulus-Based vs. Memory-Based x Singular vs. Comparative Judgment) theoretical framework suggests that there are 8 different types of inferences that consumers may form. Based on this framework, we identify gaps in the literature and suggest directions for future research. Consumers frequently make judgments and decisions based on limited information and knowledge. Using a product or hearing about a product (e.g., from advertising, promotion, or word-of-mouth communication) provides information about some properties (e.g., attributes, benefits) but the remaining properties-if they are important-must be inferred by going beyond the information given. Inference formation involves the generation of if-then linkages between information (e.g., cues, heuristics, arguments, knowledge) and conclusions (Kardes, 1993; Kruglanski & Webster, 1996). Our purpose in writing this article was to forward a theoretical framework that facilitates the summarization and categorization of findings important for consumer researchers interested in such inferences. We use this framework to organize a discussion of the contexts in which judgments and decisions regarding limited or missing information must be made and the inference processes evident in eachcontext. Given that our Requests for reprints should be sent to
Journal of Business Research, 2005
In two experiments, we assess how consumers react to competing signals of service quality by having participants compare a certified repair facility with a shop offering a warranty. Experiment 1 shows that consumers (1) associate superior tangible quality with the certified shop, (2) ascribe the certification's power to its dissipative nature, and (3) anticipate that they would be more disappointed with the certified seller for false signals. Experiment 2 shows that the certifications' perceived superiority is moderated by the consumer's need for cognition (NFC), decision focus (promotion or seeking gains, versus prevention or avoiding losses), and negative (conflicting) market information about the sellers. We find that certifications appeal most to promotion-focused higher-NFC consumers when their only option is a limited warranty and, conversely, certifications appeal least to prevention-focused lower-NFC consumers as long as they can get extended warranties. Implications of the results are discussed.
The effects of perceived scarcity on consumers’ processing of price information
Journal of the Academy of Marketing Science, 2007
This research examines how perceived scarcity influences consumers' processing of price information. To explain the effects of scarcity, a conceptual framework which incorporates both the motivational and the interference effects of scarcity on information processing is developed. The results from two studies show that under scarcity, consumers' perceptions of quality and monetary sacrifice exhibit different response patterns, depending on the relative price level and consumers' motivation to process information. We provide insights into how these perceptions of quality and sacrifice are integrated to form perceptions of value. Additional analyses of thought measures provided further understanding of the underlying processes that influenced the evaluation of price information under scarcity.
Effects of Consumer Information and Education on Cognition and Choice
Journal of Consumer Research, 1981
Consumer information and education do have an impact on decision processing. Experimental results indicate that education increases dimensional complexity but that the subjective value of central dimensions remains intact. The combination of information and education improves the consumer's ability to assess product performance, but each is ineffective alone.
I
data in the most desirable 1975; Bettman and Kakkar 1977). format. Brand name may serve as an infor-Explains tendency of subjects to Unrealistic to eliminate brand name mation chunk (Jacoby, Szybillo, acquire little information in as an information cue in the and Busato-Schach 1977). experimental choice situations. marketplace. Level of data aggregation Data should be aggregated but not Deciding how to collapse the data (Winter 1975; Day 1975). to the point that much information into summary measures. Deciding is lost or consumers are misled. how to weight the underlying dimensions. Individual Differences Conclusions Limitations Demographic factors (Thorelli Better educated and higher income Consumers of lower socioeconomic 1971; Newman and Staelin 1972; consumers tend to be more inforstatus probably need the inforThorelli, Becker, and Engledow mationconscious, althouth the re-mation the most. 1975; McEwen 1978). lationship may not be monotonic. Consumer sophistication (Sproles, Consumer sophistication plays a Not clear how to increase the Geistfeld, and Badenhop 1978). mediating role in information level of consumer sophistication. handling. Consumer Motivation (Mittelstaedt Usage will be highest when un-Not clear how to change these 1972; Burnkrant 1976). certainty is perceived to exist,, perceptions. when it is perceived as involving a potential loss, and when the new information is perceived as helping to reduce this uncertainty. Methodological Issues Conclusions Limitations Failure to account for a The greatest impact of information If no change in choice behavior hierarchy of effects (Day 1976). disclosure is likely to be obresults, there may have been little served at the initial stages of point to disclosing the information the hierarchy. in the first place. Measuring decision quality A subject's "best" choice should Problems exist in finding an appro(Jacoby, Speller, and Berning be defined ideographically.
Overestimating the Importance of the Given Information in Multiattribute Consumer Judgment
Journal of Consumer Psychology, 2003
Consumer judgment often is based on incomplete or limited knowledge of the relevant attributes. We performed 3 experiments to investigate why these judgments are often insensitive to set size and why evaluations based on limited information tend to be stronger (more extreme and confident) than is warranted. The findings indicate that the importance of the given or known attributes is often overestimated, leading to evaluations that are overly extreme. The experiments also revealed important factors moderating this insensitivity to limited information. The overweighing of the given evidence was attenuated when participants were knowledgeable of the target domain. Overweighing and the formation of extreme judgments based on limited information was also diminished when participants considered their judgmental criteria prior to evaluating a target or when a comparison target described by different attributes was present. Judgment often requires the gathering, assessment, and integration of multiple pieces of information. The evaluation of job candidates, for example, entails the summarization of evidence about the various qualifications of each applicant. Automobile assessments similarly require the integration of knowledge about various features such as styling, engine size, and repair record. A variety of different models have Requests for reprints should be sent to David M.