Saturday, March 5
9:30am – 11:00am EST
9:30am – 11:00am EST
Discussant: Christian Wheeler (Stanford University)
MC: Allie Lieberman (UCLA)
Calendar Invite: Add to calendar
Student Coordinator: Rin Yoon (Cornell University) (firstname.lastname@example.org)
Consumer Judgment of Disjunctive Risk
Outcomes (e.g., exposure to disease) often depend on whether at least one (one or more) of multiple events takes place (e.g., whether at least one of multiple people at a restaurant is infected). Across 3 studies, we find evidence that: (1) consumers underestimate the disjunctive risk that at least one of multiple negative events will take place because they are insufficiently sensitive to the accumulation of risk as the number of events grows; (2) underestimation is reduced when consumers encode a set of events as segregated subsets; and (3) reducing underestimation reduces intentions to engage in risky consumption behaviors.
Consumers Take More Risk When Their Prospects are Tied to a Future State of The World
We find that consumers make riskier choices when the options that they choose between are tied to future states of the world (e.g., win $30 if a die lands on “6” vs. a 1/6 chance of $30). These results help to explain consumers’ inconsistent risk preferences across contexts (e.g., the lab vs. real world consumer domains) and suggest that marketers can manipulate consumers’ risk preferences by manipulating whether the prospects of bets, investments, and uncertain promotions are tied to future states of the world (e.g., disclosing or hiding the condition under which an uncertain promotion pays out).
A Reference Value Theory of Sequential Choice
Do people treat unrelated purchase decisions separately? Across 12 laboratory studies and a large-scale field dataset, we find that even in unrelated purchase decisions (i.e., chocolates and a flash drive), prior purchases and rejections may bolster the likelihood of subsequent purchases and rejections, respectively (prior decision effect), and that purchase decisions in later ordinal positions have, on average, lower purchase rates (negative ordinal position effect). We explain these results with a reference value theory in which people carry a reference point for what is acceptable outcome value across decisions, and in which they update their standards following each purchase decision.
A Construal Level Account of the Valuation Effect
The valuation effect—the tendency for an active need to increase the value of objects that help address it—is fundamental to consumer psychology, but its mechanisms are unclear. Three experiments delineate the role of construal levels. Active needs elicit concrete construal levels for need-relevant, but not need-irrelevant, objects (E1); as need levels increase, construal levels become more concrete and preference ratings increase for need-relevant objects, and construal levels mediate the effects of need level on preference ratings of need-relevant objects (E2); preference ratings for need-relevant objects were greatest under a concrete construal and high need level (E3).
The Structure of a Product, Retail Environment, and Brand Logo Can Affect Judgments of Value
We demonstrate that visual structure (symmetry, balance) increases perceived utilitarian value when a product/brand fulfills utilitarian goals. However, when a product/brand fulfills hedonic goals, lack of structure increases hedonic value. Value, in turn, influence an array of marketing-relevant outcomes, including product interest, product evaluation, and the financial valuation of brands. This research has theoretical implications and actionable insights for marketing managers.
Beyond “Food” and “Entertainment”: The Effect of Budgeting Taxonomy
How consumers mentally represent expenditures is crucial to understanding their spending behaviors. Across 5 studies, we have people sort common expenditures of money (e.g., rent, dining out etc.) into categories to investigate how consumers mentally represent these purchases. Participants’ recovered representations affect their use of money. When people overspent on an item, they were more likely to spontaneously adjust spending for items closer in representation than further. The findings suggest that budgetary restriction may not be simply bounded by categories and provide insight on the demand relationships between products.
The Pliability of Perceived Value: How Quantity Description Affects Prices
How do people process quantity information during product valuation? This research documents that subtle changes in quantity description systematically affect processing mode and subsequent product valuation. Merely making perceptual units salient (e.g., 12 snack bags of chips, 1 oz. each) increases perceived economic value compared to making standardized units salient (e.g., 12 oz. of chips in snack bags, 1 oz. each). An archival study shows that the effect manifests in market prices, and six preregistered experiments highlight two distinct mechanisms that lead to increased product valuation: perceptual units induce more experiential processing, and they also bias quantity judgments.
“Icing on the Cake” or “Stealing the Spotlight”: Evidence from Eye-Tracking on How Highlighting Visuals and Presentation Formats Influence Consumers’ Attentional Processes
The current research uses an eye-tracking study to explore how presentation formats and highlighting visuals change consumers’ attentional patterns during their decision. We find that the effect of color highlighting on consumers’ attention depends on the importance of the highlighted attribute. Our study also reveals that increasing the space between products could generate a negative impact on attention and that framing product information in boxes (rather than in a table) makes consumers more susceptible to central fixation bias. The paper contributes to literature on consumer decision making by uncovering attentional mechanisms generated by different presentations of the same product information.
How and When Ranking-based Recommendations Induce Higher Willingness-to-Pay
E-tailers create various product recommendations to improve the online shopping experience. Relative to non-ranking-based recommendations (e.g., customers’ favorite), a ranking-based recommendation (e.g., highest rated) could reduce consumers’ cognitive effort to locate better options. Moreover, its superlative qualifier signals quality information and therefore enhances the recommendation’s accuracy. Across three studies, this research demonstrates that ranking-based recommendation labels reinforce e-shoppers’ quality-assessment-belief, which in turn elicits a higher willingness-to-pay than the non-ranking-based labels. This effect is attenuated when perceived product differences are a matter-of-taste or when consumers infer inferior quality from other consensus attributes.
In Darkness We See Light: How Darkness Affects Financial Decisions
Ambient lighting, a critical aspect of atmospherics, can have profound influences on how we think and behave. While the influence of brightness and dimness has investigated, little research has focused on how darkness (luminous level lower than 50 lux) can impact decision making. Darkness is commonly believed to evoke feelings of fear and uncertainty that can lead to avoidance behaviors. However, across a field study, online experiment, and lab experiment, darkness prompted riskier financial decisions, especially when these decisions were made in familiar (vs. unfamiliar) spaces. Riskier decisions resulted from darkness inducing a promotion, rather than prevention focus, which mediated this effect.