Purpose When communicating with consumers, firms frequently highlight their underdog status to evoke a favorable attitude. Previous research has confirmed consumer preference for underdogs over top dogs in various domains. However, very little research has been conducted on the business types and decision contexts in which underdog effects produce the most impact. This paper aims to investigate some of the unexplored boundary conditions of underdog effects and addresses two issues: consumption domain and retail crowding. Design/methodology/approach Two experiments with a 2 (biography: underdog or top dog) × 2 (consumption domain: hedonic or utilitarian) × 2 (retail crowding: adequately crowded or uncrowded) factorial between-subjects design were conducted to test hypotheses. The two experiments differ in the consumption domains and the approaches used to depict crowding conditions. Furthermore, the first experiment targeted college students and the second experiment targeted online consumer panels across various age groups. Findings Underdog effects were more easily evoked when the consumption domain was more hedonic than utilitarian. In addition, retail crowding was an informational cue for judging acceptance of underdog businesses and enhanced the evaluation when the retail environment was adequately crowded rather than uncrowded. This role of crowding was also evident for top-dog businesses when consumers perceived high risk in the businesses. Originality/value This is the first study to distinguish between hedonic and utilitarian consumption domains with underdog effects and to demonstrate a positive effect of crowding as an informational cue, indicating acceptance by other consumers.

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We investigate how consumers learn to form price expectations for multiattribute goods in novel product categories. We hypothesize that expectations of price among novice consumers will be dominated by simplistic intuitive conjectures about thecosts of goods that would cause expectations of prices to depart systematically from "true" values. Although we hypothesize that judgments should become more accurate-and configural-as expertise grows, we also hypothesize that learning will be limited, with even experienced consumer judges displaying some of the same biases in price expectations observed among novices. We tested these hypotheses in two studies: a dynamic laboratory task that simulated a period of learning about prices in a novel category and a cross-sectional survey that compared the multiattribute price-expectation rules used by novice and experienced consumers. The results provide a somewhat surprising view of the dynamics of price-expectation policies. First, Study 1 shows that composition rules used by novices can be highly configural in nature, even when they lack knowledge about the true rules that govern the price of goods in a category. Second, both studies support the hypothesis of limited learning, with judgments strategies of experienced consumers being only slightly more accurate in anticipating true normal market prices than those used by inexperienced consumers. A discussion of the implications of the work for research in how consumers learn to form price expectations is offered.

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PurposeResearch on vertical line extensions shows that consumers tend to evaluate upward extensions higher than downward ones. This paper examines the opposite situation. It also investigates the process underlying consumer responses by identifying a moderator and mediators.Design/methodology/approachTwo studies were conducted to assess the effect of extension direction (upward vs downward) on consumers' extension evaluations. Study 1 incorporated implicit theories of relationships (the growth belief) as a moderator and inferred motives for launching a vertical line extension as mediators in the effect. Study 2 presented a firm's rationale for undertaking the extension to examine whether it influenced evaluations.FindingsConsumers' preferences for downward over upward extensions appeared in markets where the exclusivity of luxury brands had been reduced. However, the resistance to upward extensions was weaker when consumers endorsed stronger growth beliefs in human relationships. Consumers inferred customer- and selling-oriented motives more strongly from downward than upward extensions, enhancing the evaluations. Finally, when presenting a rationale for launching an extension in the launch announcement, customer-oriented reasoning raised the evaluations higher than selling-oriented reasoning but did not elevate the evaluations higher than the announcement showing no reason.Originality/valueThis study advances the literature on vertical line extensions and shows that consumers' preference for upward over downward extensions is not universal. The opposite pattern exists in markets with a lower distinction between high- and low-end brands. It supports the theoretical notion that responses are driven by the differences in growth belief and in cognitive inferences vis-à-vis motives.