Consumer Rational (In)Attention to Favorable and Unfavorable Product Information, and Firm Information Design

Abstract

We study how a consumer optimally allocates attention to favorable and unfavorable information related to a product before purchasing it, when information processing is costly. We find that attention allocation depends on the consumer’s prior belief about whether the product matches her needs or not, and on her unit information processing cost. A consumer processes both “confirmatory” and “disconfirmatory” information to her prior belief, but to different degrees under different conditions. Generally speaking, if the consumer has an extreme prior, or if the unit cost of processing information is high such that only a small amount of information is optimally processed, she processes more confirmatory than disconfirmatory information; this offers a rational explanation for the phenomenon known as “confirmation bias.” We also find that a seller can benefit by influencing the consumer’s attention allocation by strategically choosing how much favorable and unfavorable information to make available for the consumer to process and by influencing the information processing cost, where the optimal strategy depends on the ability to adjust product price. Surprisingly, a seller has a lower incentive to suppress unfavorable information when the consumer has a worse prior belief about product fit. We illustrate our model with an application to information provision in product reviews.

Marketing and Public Policy Implications of Dobbs v. Jackson Women's Health Organization

“…To combat the spread of and reliance on misinformation, scholars must first acknowledge the prevailing influence of confirmatory biases (seeking and interpreting information to be consistent with one's currently held beliefs) when people hold strong opinions (Jerath and Ren 2021). Thus, we should focus on theory-based methods to disrupt confirmatory biases.…”

“…Abortion seekers may also be acting on incomplete and inaccurate information from a variety of sources: Individuals are posting unsafe and ineffective “abortion methods” on social media outlets suggesting herbs, over-the-counter drugs, and/or alcohol to terminate pregnancies (Gupta 2022). Health care providers and health care organizations (crisis pregnancy centers, religiously affiliated hospitals and physician practices) may not clearly disclose limits on reproductive services they provide (e.g., no contraception or abortion services available). To combat the spread of and reliance on misinformation, scholars must first acknowledge the prevailing influence of confirmatory biases (seeking and interpreting information to be consistent with one's currently held beliefs) when people hold strong opinions (Jerath and Ren 2021). Thus, we should focus on theory-based methods to disrupt confirmatory biases.…”

Exploring the relationships between perception of product quality, product ratings, and consumers’ personality traits: An eye-tracking study.

“…can be easily manipulated by the retailer. To attract consumers, such cues are usually presented on a product’s webpage, which is characterized by the presence of multiple items (e.g., product’s image, description, price, rating) which generate a positive or negative impression (Jerath & Ren, 2021) capturing consumers’ attention. However, in online purchasing situations, consumers are simultaneously exposed to multiple cues that they usually holistically process (Akdeniz et al, 2013).…”

Attention Checks in Decisions From Experience: The Case of Checking Experiments

“…Decisions from experience in general, and checking experiments in particular, allow participants to acquire abundant experience during the experiment from their own behavior (see recent reviews in Erev &Haruvy, 2016 andRoth &Yakobi, 2022). Thus, the decision not to read the experimental instructions carefully and instead learn through the experiment might be perfectly reasonable based on rational ignorance (Downs, 1957;Jerath & Ren, 2021) or certain beliefs (Erev, 2020;Gill & Rosokha, 2020); e.g., that the instructions are uninformative, useless, or even deceptive, similar to the decision not to read the instructions for a new appliance but rather learn how to use it by trial and error. If the decision not to read the instructions is deliberate (i.e., indifference towards the task), rather than the result of inattention, this has two immediate consequences.…”