The Role of Inference in Context Effects: Inferring What You Want from What Is Available

Prelec, Dražen; Wernerfelt, Birger; Zettelmeyer, Florian

doi:10.1086/209498

Cited by 141 publications

(93 citation statements)

References 8 publications

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“…Consumers believe that goods are made available and priced based on market forces such as demand from other consumers (Burson 2007;Prelec, Wernerfelt, and Zettelmeyer 1997). If consumers use contextual cues to draw inferences about how much they will use a product relative to others, they may be less interested in purchasing products they believe they will use less frequently than other people.…”

Section: Using Contextual Cues To Influence Frequency Judgmentsmentioning

confidence: 99%

“…Previous research suggests that consumers evaluate offers on the basis of the perceived fit between the offer and their own resources and needs (Kivetz and Simonson 2003;Prelec et al 1997). For example, although consumers are typically attracted to products with more features (Brown and Carpenter 2000;Thompson, Hamilton, and Rust 2005), adding features that are believed to be targeted at other consumers (e.g., calculator functions only useful to biochemistry students) can actually make products less attractive (Simonson, Carmon, and O'Curry 1994).…”

Section: Using Frequency Cues To Infer Fitmentioning

confidence: 99%

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Outpacing Others: When Consumers Value Products Based on Relative Usage Frequency

Hamilton¹,

Ratner²,

Thompson³

2011

J Consum Res

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JSTOR is a not-for-profit service that helps scholars, researchers, and students discover, use, and build upon a wide range of content in a trusted digital archive. We use information technology and tools to increase productivity and facilitate new forms of scholarship. For more information about JSTOR, please contact support@jstor.org. When considering the purchase of a new product, will consumers be more likely to make the purchase if they think about using it every day or if they think about using it every week? From an economic perspective, using a durable product more frequently should increase its perceived value. However, we show that perceived usage frequency relative to other consumers can influence product interest more than absolute usage frequency. In five studies, we use scale labels, advertisements, and customer reviews to invoke either a high-frequency or low-frequency norm. We show that high-frequency cues create less product interest and lower willingness to pay than low-frequency cues because consumers infer that their relative usage frequency will be lower, reducing the product's perceived fit. This effect is moderated by the consumer's perceived similarity to the standard of comparison and the consumer's own characteristics. The University of Chicago PressH ow do consumers decide whether to buy a durable good, and how much they are willing to pay for it? One factor they might consider during the decision process is how often they will use the product. In this article, we examine how cues suggesting that a product is expected to be used more or less frequently affect consumer interest in the product.

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Section: Using Contextual Cues To Influence Frequency Judgmentsmentioning

confidence: 99%

Section: Using Frequency Cues To Infer Fitmentioning

confidence: 99%

Outpacing Others: When Consumers Value Products Based on Relative Usage Frequency

Hamilton¹,

Ratner²,

Thompson³

2011

J Consum Res

View full text Add to dashboard Cite

show abstract

“…They would use the market offerings to assign utilities and infer their own preferences. Drazen Prelec, Wernerfelt, and Florian Zettelmeyer (1997) developed a context model that reflects simple inferences about one's own preferences (ideal points) given what is available (product "addresses"). They generate predictions that can simulate compromise and attraction effects.…”

Section: When Are Violations Of Consistencymentioning

confidence: 99%

Extending the Bounds of Rationality: Evidence and Theories of Preferential Choice

Rieskamp

Busemeyer²,

Mellers³

2006

Journal of Economic Literature

325

235

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“…Examples of such context-based covariation are given by prior research on preference formation, documenting that consumer inferences of product performance are derived from the characteristics of the other alternatives in the set (Prelec, Wernerfelt, and Zettelmeyer 1997;Wernerfelt 1995). In the same vein, prior research has documented that consumer response to marketing programs and promotional offers is a function of the degree to which these activities fit the preferences of target customers better than of the typical customer in the population (Kivetz and Simonson 2003).…”

Section: Compensatory Reasoning In Consumer Choicementioning

confidence: 99%

Jack of All Trades or Master of One? Product Differentiation and Compensatory Reasoning in Consumer Choice

Chernev¹

2007

J CONSUM RES

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This research examines consumer reactions to two common positioning strategies: a specialized-positioning strategy in which an option is described by a single feature, and an all-in-one strategy in which an option is described by a combination of features. The empirical data reported in this article demonstrate that a product specializing on a single attribute is perceived to be superior on that attribute relative to an all-in-one option, even when this attribute is exactly the same for both options. It is further shown that the observed devaluation of the all-in-one option can be mitigated by introducing another attribute on which the all-in-one option is inferior to the specialized option.W hen designing their products, companies often choose one of two positioning strategies: a narrower, specialized positioning in which products are described by a single attribute and a broader, all-in-one positioning in which products are described by a combination of attributes. To illustrate, Era is positioned by Procter and Gamble as the detergent with "powerful stain removal," Cheer promises to "help protect against fading," Gain offers "great cleaning power," and, finally, Tide combines all of the above features. Combining these positioning strategies raises the question of how consumers evaluate specialized options in the presence of an all-in-one option, and vice versa.From a conceptual standpoint, combining specialized and all-in-one options raises several issues: (1) whether and how the perceived performance of the attributes differentiating an all-in-one option would change in the presence of options specialized on each of these attributes (e.g., the change in the perceived stain-removal and fading-prevention performance of Tide in the presence of Era and Cheer); (2) whether and how the perceived performance of the differentiating attribute of a specialized option would change in the presence of an all-in-one option (e.g., the change in the perceived stain-removal performance of Era and the fading-prevention *Alexander Chernev is associate professor of marketing, Kellogg School of Management, Northwestern University, Evanston, IL 60208 (ach@ northwestern.edu). The author thanks Gregory Carpenter, Pierre Chandon, Ryan Hamilton, the editor, associate editor, and the three anonymous reviewers for their constructive comments. This research has benefited from seminars at the University of Pennsylvania and Cornell University. Dawn Iacobucci served as editor and Durairaj Maheswaran served as associate editor for this article.Electronically published January 22, 2007 performance of Cheer in the presence of Tide); and (3) whether and how the perceived performance of nondifferentiating attributes of a specialized option would change in the presence of an all-in-one option (e.g., the change in the perceived fading-prevention performance of Era and the stain-removal performance of Cheer in the presence of Tide). Despite their conceptual importance and practical relevance, these issues have not been explicitly addressed in t...

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The Role of Inference in Context Effects: Inferring What You Want from What Is Available

Cited by 141 publications

References 8 publications

Outpacing Others: When Consumers Value Products Based on Relative Usage Frequency

Outpacing Others: When Consumers Value Products Based on Relative Usage Frequency

Extending the Bounds of Rationality: Evidence and Theories of Preferential Choice

Jack of All Trades or Master of One? Product Differentiation and Compensatory Reasoning in Consumer Choice

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