Journal of Marketing Research

White, Katherine, Lily Lin, Darren W. Dahl, and Robin J. B. Ritchie (2016), “When Do Consumers Avoid Imperfections? Superficial Packaging Damage as a Contamination Cue,” Journal of Marketing Research, 53 (February), 110–23. (Original DOI: 10.1509/jmr.12.0388)

The following reporting errors have been noted in this article. These errors were clerical only, and the changes do not affect the data patterns or significance of the results in any way.

The authors offer a new conceptualization and operational model of consumer choice that allows context-sensitive information usage and preference heterogeneity to be separately and simultaneously captured, thus transforming the axiom of full information use into a testable hypothesis. A key contribution of the proposed framework is the integration of two previously disjointed and often antagonistic research paradigms: (1) the economic rationality perspective, which assumes stable preferences and full information usage, and (2) the psychological bounded-rationality perspective, which allows context-sensitive preferences and information selectivity. The authors demonstrate that the two paradigms can and do coexist in the same decision-making space, even at the level of individual consumer choices. The proposed information archetype mixture model is tested in four studies that span different product categories and levels of task complexity. The findings have ramifications for choice modeling theory and implementation, beyond the disciplinary boundaries of marketing to applied economics and choice-focused social sciences.

The authors identify and examine the effect of space-to-product ratio on consumer response; very generally, consumers perceive products as more valuable when more space is devoted to their display. In both lab and field studies, the authors find that this phenomenon influences total sales, purchase likelihood, and even perceived product experience (taste perceptions). More interstitial space increases perceptions of individual products as more aesthetically pleasing and the store as more prestigious. The authors find these effects across a variety of product categories and rule out a number of competing alternative explanations that are based on perceptions of product popularity, scarcity, assortment search difficulty, and messiness.

The authors investigate how horizontal versus vertical displays of alternatives affect assortment processing, perceived variety, and subsequent choice. Horizontal (vs. vertical) displays are easier to process due to a match between the human binocular vision field (which is horizontal in direction) and the dominant direction of eye movements required for processing horizontal displays. It is demonstrated that this processing fluency allows people to browse information more efficiently, which increases perceived assortment variety and ultimately leads to more variety being chosen, and if the number of options chosen is allowed to vary, it leads to more options chosen. It is shown that because people see more variety in a horizontal (vs. vertical) display, they process a horizontal assortment more extensively. When more variety is positive, they find the choice task easier and have a higher level of satisfaction and confidence about their choices. When more variety is not necessarily positive, for example, in a choice of a single most-preferred option, these effects disappear. Two field studies, an eye-tracking study, and two lab studies support these conclusions.

In offline purchasing settings (e.g., retail stores), consumers often encounter reminders that product information can be found on the Internet. The authors refer to a reminder of the availability of online information as a “cue-of-the-cloud” and explore its unique consequences on offline consumer behavior. This research finds that when consumers are presented with relatively large amounts of information in offline purchasing situations, a cue-of-the-cloud can enhance purchase intentions and choice behaviors. This occurs because the cue increases consumers’ confidence in being able to retain and access the information seen in-store, which engenders positive feelings about the decision to purchase. Four studies, including two experiments in real brick-and-mortar field settings, demonstrate the consequences of a cue-of-the-cloud, along with some novel moderators of these effects.

How does interpersonal closeness (IC)—the perceived psychological proximity between a sender and a recipient—influence word-of-mouth (WOM) valence? The current research proposes that high levels of IC tend to increase the negativity of WOM shared, whereas low levels of IC tend to increase the positivity of WOM shared. The authors hypothesize that this effect is due to low versus high levels of IC triggering distinct psychological motives. Low IC activates the motive to self-enhance, and communicating positive information is typically more instrumental to this motive than communicating negative information. In contrast, high IC activates the motive to protect others, and communicating negative information is typically more instrumental to this motive than communicating positive information. Four experiments provide evidence for the basic effect and the underlying role of consumers’ motives to self-enhance and protect others through mediation and moderation. The authors discuss implications for understanding how WOM spreads across strongly versus weakly tied social networks.

Strategic resource allocation in growth markets is always a challenging task. This is especially true when it comes to determining the level of investments and expenditures for customer acquisition and retention in competitive and dynamic market environments. This study develops an analytical model to examine firms’ investments in customer acquisition and retention for a new service; it develops hypotheses drawing on analytical findings and tests them with firm-level operating data of wireless telecommunications markets from 41 countries during 1999–2007. The empirical investigation shows that a firm's acquisition cost per customer is more sensitive to market position and competition than retention cost per customer. Furthermore, whereas firms leading in market share, on average, do not have a cost advantage over other firms in retaining customers, they have a substantial cost advantage in acquiring customers, and this advantage tends to increase with market penetration. The study results provide guidelines for firms’ strategic resource allocation for customer acquisition and retention in competitive service markets.

People are able to order food using a variety of computer devices, such as desktops, laptops, and mobile phones. Even in restaurants, patrons can place orders on computer screens. Can the interface that consumers use affect their choice of food? The authors focus on the “direct-touch” aspect of touch interfaces, whereby users can touch the screen in an interactive manner. In a series of five studies, they show that a touch interface, such as that provided by an iPad, compared with a nontouch interface, such as that of a desktop computer with a mouse, facilitates the choice of an affect-laden alternative over a cognitively superior one—what the authors call the “direct-touch effect.” The studies provide some mediational support that the direct-touch effect is driven by the enhanced mental simulation of product interaction with the more affective choice alternative on touch interfaces. The authors also test the moderator of this effect. Using multiple product pairs as stimuli, the authors obtain consistent results, which have rich theoretical and managerial implications.

This research illustrates how perceived economic mobility moderates the linkage between materialism and impulsive spending. Using various data sources, four studies show that materialistic consumers do not easily engage in impulsive spending when they perceive high economic mobility, whereas they tend to spend impulsively when they perceive low economic mobility. However, perceived economic mobility functions in the opposite manner when the purchase is a means to achieve financial success. The authors trace this effect to the self-regulation process of materialistic consumers, such that when perceiving high economic mobility, these consumers regulate their behavior toward long-term financial success, sacrificing the pleasure of acquisitions in the present. By elucidating the important role that perceived economic mobility plays in impulsive spending, the current research sheds new light on consumer research and offers managerial and public policy implications.

In the modern advertising agency selection contest, each participating agency specifies not only its proposed creative campaign but also the budget required to purchase the agreed-on media. The advertiser selects the agency that offers the best combination of creative quality and media cost, similar to conducting a score auction. To participate in the contest, each agency needs to incur an up-front bid-preparation cost to cover the development of a customized creative campaign. Agency industry literature has called for the advertiser to fully reimburse such costs to all agencies that enter the contest. The authors analyze the optimal stipend policy of an advertiser facing agencies with asymmetric bid-preparation costs, such that the incumbent agency faces a lower bid-preparation cost than a competitor agency entering the contest. The authors show that reimbursing bid-preparation costs in full is never optimal, nor is reimbursing any part of the incumbent's bid-preparation cost. However, a stipend that is strictly lower than the competitor's bid-preparation cost can benefit the advertiser under certain conditions. The authors provide a sufficient condition (in terms of the distribution of agency values to the advertiser) for such a new-business stipend to benefit the advertiser.

Maintaining savings is an important financial goal. Yet there are times when savings should be spent, such as when people face unavoidable costs, and spending their savings allows them to avoid high interest rate debt. Existing behavioral research has focused on consumer decisions between savings and discretionary spending and has proposed interventions to promote savings in these contexts. However, when spending is not discretionary, such interventions could risk exacerbating a pattern found in economic research in which people borrow high interest rate debt while maintaining savings that earn low levels of interest. To examine how mental accounting interacts with considerations of personal responsibility and guilt to contribute to this pattern, this article explores whether people spend their savings when they need money most: during emergencies. Six studies reveal that people's tendency to preserve savings by borrowing from a high interest rate credit option varies as a function of the savings’ intended use. Paradoxically, people are most likely to turn to high interest rate credit with the belief that doing so is the responsible option.

Research on choice architecture is shaping policy around the world, touching on areas ranging from retirement economics to environmental issues. Recently, researchers and policy makers have begun paying more attention not just to choice architecture but also to information architecture, or the format in which information is presented to people. In this article, the authors investigate information architecture as it applies to consumption in retirement. Specifically, in three experiments, they examine how people react to lump sums versus equivalent streams of monthly income. Their primary question of interest is whether people exhibit more or less sensitivity to changes in retirement wealth expressed as lump sums (e.g., $100,000) or monthly equivalents (e.g., $500 per month for life). They also test whether people exhibit an “illusion of wealth,” by which lump sums seem more adequate than monthly amounts in certain conditions, as well as the opposite effect, in which lump sums seem less adequate. They conclude by discussing how format-dependent perceptions of wealth can affect policy and consumers’ financial decision making.

In examining how stress influences consumer saving and spending, the authors propose that consumers who experience a stressful situation allocate their resources strategically to gain control of their environment. A series of studies shows that this strategic allocation of resources occurs in two ways. Consumers experiencing stress may show increased saving behavior, which assures them that monetary resources will be available when needed. Alternatively, consumers experiencing stress may show increased spending behavior, directed specifically toward products that the consumer perceives to be necessities and that allow for control in an otherwise uncontrollable environment. This conceptualization and the related findings can inform assessments of when stress will lead to beneficial or impulsive consumer behaviors.

How does setting a donation option as the default in a charitable appeal affect people's decisions? In eight studies, comprising 11,508 participants making 2,423 donation decisions in both experimental settings and a large-scale natural field experiment, the authors investigate the effect of “choice-option” defaults on the donation rate, average donation amount, and the resulting revenue. They find (1) a “scale-back” effect, in which low defaults reduce average donation amounts; (2) a “lower-bar” effect, in which defaulting a low amount increases donation rate; and (3) a “default-distraction” effect, in which introducing any defaults reduces the effect of other cues, such as positive charity information. Contrary to the view that setting defaults will backfire, defaults increased revenue in the field study. However, the findings suggest that defaults can sometimes be a “self-canceling” intervention, with countervailing effects of default option magnitude on decisions and resulting in no net effect on revenue. The authors discuss the implications of the findings for research on fundraising specifically, for choice architecture and behavioral interventions more generally, and for the use of “nudges” in policy decisions.

Research on overeating assumes that pleasure must be sacrificed for the sake of good health. Contrary to this view, the authors show that focusing on sensory pleasure can make people happier and willing to spend more for less food, a triple win for public health, consumers, and companies alike. In five experiments, the authors ask U.S. and French adults and children to imagine vividly the taste, smell, and texture of three hedonic foods before choosing a portion size of another hedonic food. Compared with a control condition, this “multisensory imagery” intervention led hungry and nondieting people to choose smaller food portions, and they anticipated greater eating enjoyment and were willing to pay more for them. This occurred because multisensory imagery prompted participants to evaluate portions on the basis of expected sensory pleasure, which peaks with smaller portions, rather than hunger. In contrast, health-based interventions led people to choose a smaller portion than the one they expected to enjoy most—a hedonic cost for them and an economic cost for food marketers.

Defaults are extremely effective at covertly guiding choices, which raises concerns about how to employ them ethically and responsibly. Consumer advocates have proposed that disclosing how defaults are intended to influence choices could help protect consumers from being unknowingly manipulated. This research shows that consumers appreciate transparency, but disclosure does not make defaults less influential. Seven experiments demonstrate that disclosure alters how fair consumers perceive defaults to be but does not attenuate default effects because consumers do not understand how to counter the processes by which defaults bias their judgment. Given that defaults lead consumers to focus disproportionately on reasons to choose the default even with disclosure, debiasing default effects requires that consumers engage in a more balanced consideration of the default and its alternative. Encouraging people to articulate their preferences for the default or its alternative, as in a forced choice, shifts the focus away from the default and reduces default effects.