Consumer perceived value: The development of a multiple item scale

The purpose of this article is to review basic empirical results from the psychological literature in a way that provides a useful foundation for research on consumer knowledge. A conceptual organization for this diverse literature is provided by two fundamental distinctions. First, consumer expertise is distinguished from product-related experience. Second, five distinct aspects, or dimensions, of expertise are identified: cognitive effort, cognitive structure, analysis, elaboration, and memory. Improvements in the first two dimensions are shown to have general beneficial effects on the latter three. Analysis, elaboration, and memory are shown to have more specific interrelationships. The empirical findings related to each dimension are reviewed and, on the basis of those findings, specific research hypotheses about the effects of expertise on consumer behavior are suggested.

Dimensions of Consumer Expertise

A review is presented of the book “Heuristics and Biases: The Psychology of Intuitive Judgment,” edited by Thomas Gilovich, Dale Griffin, and Daniel Kahneman.

Heuristics and Biases: The Psychology of Intuitive Judgment

Perhaps the simplest and the most basic qualitative law of probability is the conjunction rule: The probability of a conjunction, P (A&B) cannot exceed the probabilities of its constituents, P (A) and P (B), because the extension (or the possibility set) of the conjunction is included in the extension of its constituents. Judgments under uncertainty, however, are often mediated by intuitive heuristics that are not bound by the conjunction rule. A conjunction can be more representative than one of its constituents, and instances of a specific category can be easier to imagine or to retrieve than instances of a more inclusive category. The representativeness and availability heuristics therefore can make a conjunction appear more probable than one of its constituents. This phenomenon is demonstrated in a variety of contexts including estimation of word frequency, personality judgment, medical prognosis, decision under risk, suspicion of criminal acts, and political forecasting. Systematic violations of the conjunction rule are observed in judgments of lay people and of experts in both between-subjects and within-subjects comparisons. Alternative interpretations of the conjunction fallacy are discussed and attempts to combat it are explored.

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Extensional versus intuitive reasoning: The conjunction fallacy in probability judgment.

Much research in the last two decades has demon- strated that human responses deviate from the performance deemed normative according to various models of decision mak- ing and rational judgment (e.g., the basic axioms of utility theory). This gap between the normative and the descriptive can be inter- preted as indicating systematic irrationalities in human cognition. However, four alternative interpretations preserve the assumption that human behavior and cognition is largely rational. These posit that the gap is due to (1) performance errors, (2) computational limitations, (3) the wrong norm being applied by the experi- menter, and (4) a different construal of the task by the subject. In the debates about the viability of these alternative explanations, attention has been focused too narrowly on the modal response. In a series of experiments involving most of the classic tasks in the heuristics and biases literature, we have examined the implica- tions of individual differences in performance for each of the four explanations of the normative/descriptive gap. Performance er- rors are a minor factor in the gap; computational limitations un- derlie non-normative responding on several tasks, particularly those that involve some type of cognitive decontextualization. Un- expected patterns of covariance can suggest when the wrong norm is being applied to a task or when an alternative construal of the task should be considered appropriate.

https://www.cambridge.org/core/services/aop-cambridge-core/content/view/S0140525X00003435

Individual differences in reasoning: Implications for the rationality debate?

All Frames Are Not Created Equal: A Typology and Critical Analysis of Framing Effects

Consumers rated several qualitative attributes of ground beef that framed the beef as either “75% lean” or “25% fat.” The consumers' evaluations were more favorable toward the beef labeled “75% lean” than that labeled “25% fat.” More importantly, the magnitude of this information framing effect lessened when consumers actually tasted the meat. We discuss these results in terms of an averaging model, which suggests that a diagnostic product experience dilutes the impact of information framing.

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How Consumers Are Affected by the Framing of Attribute Information Before and After Consuming the Product

A new look at framing effects: Distribution of effect sizes, individual differences, and independence of types of effects

When information on product quality is not perfect, theories in the areas of consumer rationality, inference, and risk-aversion suggest at least three consumer choice strategies: best value, price-...

Best Value, Price-Seeking, and Price Aversion: The Impact of Information and Learning on Consumer Choices:

Consumers' reactions to multi-product bundles — two different products sold for one price — were obtained by systematically varying the attributes of both the primary product (e.g., VCRs) and the tie-in product (e.g., videocassette tapes). Respondents were given written product descriptions as well as the opportunity to inspect the actual products before responding. The results across a variety of dependent measures suggest that evaluations of the primary product and the tie-in product are averaged or balanced when evaluating product bundles. Furthermore, attributes of the tiein product had a much larger effect on the evaluations of product bundles than would be expected on the basis of their monetary worth alone. Other aspects of our results suggest that product bundling as a marketing strategy compares favorably with the use of cash rebates, especially when the bundle is enhanced by including a high-quality tie-in product.

Gary J. Gaeth

Papers

All Frames Are Not Created Equal: A Typology and Critical Analysis of Framing Effects

How Consumers Are Affected by the Framing of Attribute Information Before and After Consuming the Product

A new look at framing effects: Distribution of effect sizes, individual differences, and independence of types of effects

Best Value, Price-Seeking, and Price Aversion: The Impact of Information and Learning on Consumer Choices:

Consumer evaluation of multi-product bundles: An information integration analysis