Knowledge that Transforms

How should consumers sequence the different stimuli they consume: cluster each stimulus together, or intermix them to break things up? Surprisingly, prior literature has provided little insight into this question, even though consumers face it on a regular basis. We propose that clustering each stimulus type together can prolong enjoyment (vs. intermixing the types). Six studies confirm that clustering slows hedonic decline, and process evidence shows this happens because clustering leads people to attend more to the different details offered by a stimulus during repeated exposures. We also establish two boundary conditions for this effect: clustering does not slow hedonic decline in the presence of regular intervening distractions, or for impoverished stimuli lacking rich details. The present work is among the first to examine the interplay of consumption sequence and hedonic decline, and the findings provide consumers and firms with practical guidance on how to consider sequencing experiences to enjoy them longer.

While much is known about product bundles comprised of different items, much less is known about multipacks—a product set comprised of multiple identical items (e.g., a 4-pack body washes). Using the context of multipacks, the authors propose a novel price divisibility effect, which suggests that a multipack’s price that is easily divisible (vs. non-divisible) by the number of component items in the multipack will increase its purchase likelihood. For example, purchase likelihoods of a four-pack body wash multipack will be higher when its price is $16 (easily divisible by 4) versus $15.30 (non-divisible by 4). This occurs because a divisible versus non-divisible price shifts consumers’ attention to the unit and creates a belief that each unit item in the multipack will be consumed quickly, which, in turn, helps justify purchasing multiple units. The authors report findings from 15 studies (including a field experiment), where they demonstrate the effect and its underlying mechanism and delineate several moderators and boundary conditions. This research contributes to several literature streams, including those on product bundling, multiple-unit pricing, product consumption, and numerical cognition.

Do different loan application formats affect consumer loan requests? Six studies show that when consumers are asked to provide a preferred monthly payment (MP) (vs. loan amount [LA]), they request different principal amounts. This is because these loan application formats differ in the scale-compatible information they bring to consumers’ mind. When LAs are elicited, consumers think of and request the cost of the expenditure they seek to finance. When MPs are elicited, however, consumers think of their monthly budget slack to construct and then request MPs they perceive to be affordable. For lower cost loans with a given term and interest rate, the MP (vs. LA) format results in larger principal requests. This effect reverses for higher cost acquisitions because individuals’ budget slack caps out around $500 per month. These studies provide insight into how consumer loan application formats can affect consumer borrowing, as well as the psychological underpinnings responsible for the effect. Theoretical, managerial, and consumer welfare implications of the findings are discussed.

In real-world marketplaces, one may encounter an alternative that is inferior to another one in the assortment. While the presence of such seemingly irrelevant inferior alternatives should ostensibly have no influence on consumers’ decisions, an extensive literature using stylized lab experiments has found that, surprisingly, their presence matters. Specifically, the dominance effect suggests that the presence of an inferior alternative shifts consumer’s preferences toward the alternative made to be superior. However, null results in some recent lab studies and a lack of real-world evidence call into question whether, when, and how the effect exists. In this work, we find clear evidence that dominance matters in the wild. We also identify an important moderator for the dominance effect—preference uncertainty—and test it in both a real-world marketplace for digital freelance services and a lab experiment. Further, we find evidence for additional moderators that help explain how the effect works, including the count of dominated alternatives and the magnitude of dominance, consistent with a perceptual mechanism. This work is the first to use consequential field data to shed light on when and why the dominance effects occur, with implications for marketers, choice architects, user interface designers, and policymakers.