Knowledge that Transforms

How decision makers invest their effort among various issues is critical to organizational success ( Ocasio 1997 ). The authors investigate the effects of issue valence and issue capability on how decision makers allocate effort to an issue. They develop hypotheses regarding these constructs and test them in three studies. Results show that in the condition of high capability, decision makers are more likely to invest effort in an issue that is negatively, rather than positively, framed. Conversely, with low capability, they are more likely to invest effort in an issue that is positively, rather than negatively, framed. Results also clarify the variable focus on upside potential and risk taking as two mechanisms that underlie this preference reversal.

Previous research has suggested that households and individuals may possess multiple preferences for a given product category. These multiple preferences may be the result of multiple individuals in a household, different uses and usage occasions, and/or variety seeking. As such, single ideal point models that assume a single invariant ideal point may be operating from a false and misleading assumption. We propose a multiple ideal point model to capture these multiple preference effects. The basic premise of the model is that consumers may possess a set of ideal points, each of which represents a distinct preference. At any given purchase occasion, one of these points is “activated” with some probability, and choices are made with respect to its characteristics. In this article, the authors assess the multiple ideal point model and an associated estimation procedure with respect to the model's ability to recover a true choice structure. The authors then empirically test the model on Information Resources Inc. panel data from the powdered soft drink category. The authors discuss the results and introduce directions for further research.

When people stockpile products, how do they decide when and how much they will consume? To answer this question, the authors develop a framework that shows how the salience and convenience of products influence postpurchase consumption incidence and quantity. Multiple research methods—including scanner data analysis, a field study, and two laboratory studies—show that stockpiling increases product salience and triggers consumption incidence among high-convenience products. However, when the decision is made to consume a product, stockpiling increases the consumption quantity for both high- and low-convenience products. In addition to providing new insights on how consumers make postpurchase consumption decisions, these results have implications for the debate on the value of promotions that induce stockpiling.

The author studies the pricing of information with private value (e.g., management consulting, legal advice, medical diagnosis). Anecdotal evidence shows that in some of these markets, competing information sellers split the business to sell only first or second opinions to their customers. The author explains this pricing practice by showing that second-opinion markets are a result of temporal differentiation.