A Selective Hypothesis Testing Perspective on Price‐Quality Inference and Inference‐Based Choice

Consumers often rely heavily on price as a predictor of quality and typically overestimate the strength of this relation. Furthermore, the inferences of quality they make on the basis of price can influence their actual purchase decisions. Selective hypothesis testing appears to underlie the effects of information load and format on price–quality inferences. Results of 5 experiments converge on the conclusion that quality inferences are more heavily influenced by price when individuals have a high need for cognitive closure, when the amount of information presented is high (vs. low), and when the information presented is rank ordered in terms of quality rather than presented randomly. Furthermore, because consumers are willing to purchase more expensive brands when they perceive a high price–quality correlation, these variables can also influence their purchase decisions.     

Construal‐Level Effects on Preference Stability,Preference‐Behavior Correspondence,and the Suppression of Competing Brands

Construal level theory (Trope & Liberman, 2003) suggests that construal level––or the degree of abstractness of mental representations––increases with temporal, spatial, or sensory distance. Three experiments show that the mere presence of a set of target brands at the time a choice is made encourages consumers to represent the brands in memory in terms of concrete lower‐level construals. Consequently, preference stability is higher, preference‐behavior consistency is greater, and product category‐identification latencies for competing brands are slower. Furthermore, the mere presence of target brands at the time of choice affects preference‐behavior consistency independent of the effects of direct experience. Implications for an understanding of spontaneous preference formation, preference representation, and preference elicitation are discussed.     

When Should Consumers and Managers Trust Their Intuition?

Ambady, Krabbenhoft, Hogan, and Rosenthal (2006) demonstrated that “thin slices” or very brief observations of behavior are not only sufficient for drawing accurate automatic trait inferences, they actually improve accuracy, relative to inferences based on larger amounts of information. Too much information, too much knowledge, or too much analysis can reduce the accuracy of intuitive judgment. Who benefits most and what types of judgments benefit most from thin‐slice data? When should people trust their intuition? The answers to these questions depend on informational variables, such as feedback quality and the consequences of inferential errors (Hogarth, 2001). Evidence is reviewed suggesting that consumers and managers should trust their intuition only when high quality (frequent, prompt, and diagnostic) feedback is available and when inferential errors are consequential and therefore easy to detect.     

Contextual Influences on Judgment Based on Limited Information

When judging objects described by incomplete evidence, people often make judgments on the basis of what is known and fail to adjust for what is unknown. However, contextual factors may increase sensitivity to the limited weight of the given information. Consistent with this hypothesis, four experiments show that sensitivity to the limitations of the evidence and the likelihood of judgmental moderation increases when (a) a target is judged in the context of a similar object described on dimensions different from those used to describe the target, or (b) a target is judged in the context of a completely different type of object described by a relatively large amount of information. Considered together, the results suggest that judgment is moderated when contextual objects or cues alert judges to specific omissions or when contextual cues imply a general lack of information. The findings illuminate the diverse effects that even context objects of a different category have on information integration judgment. Context objects may affect the weighting as well as the valuation of the evidence about targets described by limited information and thereby contribute to judgmental moderation. Finally, the findings illustrate the contextually sensitive nature of the weighting criteria that guide information integration.     

The Role of Omission Neglect in Response to Non-Gains and Non-Losses in Gasoline Price Fluctuations

Research on omission neglect has shown that people are insensitive to many different types of missing, unmentioned, or unknown information. However, prior research has not examined the role of omission neglect in non-gain and non-loss framing. The present research shows that gain/loss framing effects are greater than non-gain/non-loss framing effects on judgments of the ease with which various scenarios can be imagined, judgments of believability, attributions to price gouging, and attributions to inflation. The results also show that negative outcomes are more influential than are positive outcomes in judgments of imaginability, believability, and fairness, and in attribution judgments. Considered together, the results suggest that omission neglect plays an important role in insensitivity to non-gains and non-losses.