Knowledge that Transforms

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.

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.

Cognitive linguistic studies have found that people perceive time to be intertwined with space. Western consumers, in particular, visualize time on a horizontal spatial axis, with past events on the left and future events on the right. Underexplored, however, is whether and how space-time associations influence future time-related judgments and decisions. For instance, can spatial location cues affect intertemporal decisions? Integrating cognitive linguistics, time psychology, and intertemporal choice, the authors demonstrate across five studies that when choices are displayed horizontally (vs. vertically), consumers more steeply discount future outcomes. Furthermore, this effect is serially mediated by attention to time and anticipated duration estimates. Specifically, the authors propose and demonstrate that horizontal (vs. vertical) temporal displays enhance the amount of attention devoted to considering the time delay and lead consumers to overestimate how long it will take to receive benefits. This research has important implications for consumers who want to forgo immediate gratification and for firms that need to manage consumers’ time perceptions.

Bayesian methods for dynamic models in marketing have so far been parametric. For instance, it is invariably assumed that model errors emerge from normal distributions. Yet using arbitrary distributional assumptions can result in false inference, which in turn misleads managers. The author therefore presents a set of flexible Bayesian nonparametric (NP) dynamic models that treat error densities as unknown but assume that they emerge from Dirichlet process mixtures. Although the methods address misspecification in dynamic linear models, the main innovation is a particle filter algorithm for nonlinear state-space models. The author used two advertising studies to confirm the benefits of the methods when strict error assumptions are untenable. In both studies, NP models markedly outperformed benchmarks in terms of fit and forecast results. In the first study, the benchmarks understated the effects of competitive advertising on own brand awareness. In the second study, the benchmark inflated ad quality, and consequently, the effects of past advertising appeared 36% higher than that predicted by the NP model. In general, these methods should be valuable wherever state-space models appear (e.g., brand and advertising dynamics, diffusion of innovation, dynamic discrete choice).

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.

Consumers often fail to utilize desirable offers they had originally selected and planned to use and thus later regret missing out on them. This failure to follow through induces an opportunity cost. In contrast to prior research findings that opportunity costs tend to be underestimated, the authors propose that in situations where the need to choose arises from external rather than internal constraints, opportunity costs may actually be overestimated. Consumers view choice constraints as external when the necessity to trade off one option for another relates to extraneous resource limitations (e.g., whenever time, budget, or space constraints necessitate choosing between two desirable offers). Conversely, consumers perceive choice constraints as internal when that trade-off is “built-in” (e.g., when a marketing incentive requires choosing between two desirable offers). Five studies demonstrate that choosing on the basis of an external constraint induces consumers to imagine ways in which they can utilize all of the competing options in the choice set. Consequently, consumers feel that by failing to utilize their chosen option, they simultaneously miss out on all options (although in actuality they could have realized only one of those options). Consistent with this conceptualization, only consumers who want to use all of the choice set options simultaneously demonstrate opportunity cost overestimation.

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.

This article studies how the incentive structures and disclosure schemes of a contest affect the contestants’ intrinsic motivations. Specifically, the authors measure the effects of these design decisions on two types of nonmonetary rank-based utility: self-generated and peer-induced. They run a set of laboratory experiments involving contests under various reward spreads and disclosure schemes. First, they find that virtually all commonly adopted disclosure schemes generate positive peer-induced rank-based utility. However, the relative performances of alternative disclosure schemes can depend on the spread of contest rewards and the number of contestants. Second, being recognized as a winner confers positive peer-induced rank-based utility; moreover, being recognized as the sole first-place winner or as one among multiple winners does not produce significantly different peer-induced utility. Third, “shaming” by disclosing the identity of contestants ranked at the bottom leads to negative peer-induced rank-based utility, but the effect is marginally insignificant. Finally, a smaller spread of contest rewards consistently results in higher levels of self-generated rank-based utility. These results underscore the importance of jointly choosing incentive structures and disclosure schemes.

The authors propose a new truth-telling technique and statistical model called “item count response technique” (ICRT) to assess the prevalence and drivers of sensitive consumer behavior. Monte Carlo simulations and a large-scale application to self-reported cigarette consumption among pregnant women (n = 1,315) demonstrate the effectiveness of the procedure. The ICRT provides more valid and precise prevalence estimates and is more efficient than direct self-reports and previous item count techniques. It accomplishes this by (1) incentivizing participants to provide truthful answers, (2) accounting for procedural nonadherence and differential list functioning, and (3) obviating the need for a control group. The ICRT also facilitates the use of multivariate regression analysis to relate the prevalence of the sensitive behavior to individual-level covariates for theory testing and policy analysis. The empirical application reveals a significant downward bias in prevalence estimates when questions about cigarette consumption were asked directly to pregnant women, or when standard item count techniques were used. The authors find lower smoking prevalence among women with higher levels of education and who are further along in their pregnancy, and a much higher prevalence among unmarried respondents.

This article examines how consumers’ exposure to the viewpoint of high versus low vertical position changes their risk-taking behavior. The author proposes that consumers’ views of scenery from a high physical elevation induce an illusory sense of control, which in turn intensifies risk taking. Multiple studies show that exposure to the viewpoint of high vertical positions increases risk taking in both laboratory settings (Studies 1a, 1b, and 1c) and real settings (Study 4). In addition, the author demonstrates that an illusory sense of control mediates the effect of an elevated viewpoint on risk taking (Study 2) and that the effect of elevation on risk taking is attenuated when people use a low-level mental construal to process visual information (Study 3).