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Copyright by Demetra Andrews, 2009
ALL RIGHTS RESERVED
Effects of Missing Information in
Sequential Choice
A Dissertation
Presented to
The Faculty of the College of the C.T. Bauer College of Business
University of Houston
In Partial Fulfillment
Of the Requirements for the Degree
Doctor of Philosophy
By
Demetra Andrews
April 2009
Effects of Missing Information in Sequential Choice
APPROVED:
____________________________________
Edward A. Blair, Professor of Marketing and Department Chair
Chair of the Committee
____________________________________
Parthasarathy Krishnamurthy, Associate Professor of Marketing and Bauer Faculty Fellow
____________________________________
Ye Hu, Assistant Professor of Marketing
____________________________________
Linda K. Acitelli, Associate Professor and Director of the Social Psychology and Health Program, University of Houston, Department of Psychology
___________________________________
Arthur D. Warga, Dean
C.T. Bauer College of Business
For my extraordinary family, Dad, Mom, Tyler, Ricardo, Patrick, Katina, Jimmy, Gordon, Pippa, LaTanya, Octavia, Angelia, and all the kids. Your phenomenal encouragement, support, and prayers made this possible. I love you all tremendously!
Effects of Missing Information in Sequential Choice
Effects of Missing Information in Sequential Choice
ABSTRACT
Most choices are made despite incomplete information. When the missing information relates to product attributes, it can give rise to uncertainty about future outcomes. While prior research has often considered the influence of such pre-choice uncertainty on pre-choice behaviors such as search and employment of decision strategies and heuristics, less emphasis has been placed on the influence that such uncertainty may exert in the post-choice space. However, it is during this period that customers evaluate prior decisions and outcomes and decide whether or not to repeat a particular choice, a behavior that is key to the success of marketing entities.
The current research considers how uncertainty due to missing information influences important post-choice consumer phenomena, namely the likelihood of repurchase, the nature of switching behavior, and satisfaction with obtained outcomes. As such, this research responds to contrasting arguments from existing literature regarding the post-choice influence of outcome uncertainty and extends our understanding of post-choice influences of pre-choice uncertainty. Findings from three experimental studies are reported that evaluate differences in the likelihood of repurchase as a function of the level of outcome uncertainty that is experienced, the realized outcome, and changes in the decision context. Further, patterns of sequential choice are examined with the objective of determining whether outcome uncertainty facilitates learning from choice.
TABLE OF CONTENTS
TOC \o "1-3" \h \z \u HYPERLINK \l "_Toc229289925" ABSTRACT PAGEREF _Toc229289925 \h v
HYPERLINK \l "_Toc229289926" LIST OF TABLES PAGEREF _Toc229289926 \h viii
HYPERLINK \l "_Toc229289927" LIST OF FIGURES PAGEREF _Toc229289927 \h ix
HYPERLINK \l "_Toc229289928" CONCEPTUALIZATION OF OUTCOME UNCERTAINTY PAGEREF _Toc229289928 \h 4
HYPERLINK \l "_Toc229289929" THE INLFUENCE OF MISSING INFORMATION PAGEREF _Toc229289929 \h 6
HYPERLINK \l "_Toc229289930" Direct Influence on Repurchase PAGEREF _Toc229289930 \h 6
HYPERLINK \l "_Toc229289931" H1 PAGEREF _Toc229289931 \h 7
HYPERLINK \l "_Toc229289932" Indirect Influence on Repurchase PAGEREF _Toc229289932 \h 7
HYPERLINK \l "_Toc229289933" H2 PAGEREF _Toc229289933 \h 8
HYPERLINK \l "_Toc229289934" H2a PAGEREF _Toc229289934 \h 8
HYPERLINK \l "_Toc229289935" RESEARCH OBJECTIVES AND EMPIRICAL STRATEGY PAGEREF _Toc229289935 \h 9
HYPERLINK \l "_Toc229289936" DEVELOPING A MANIPULATION OF UNCERTAINTY (Pretest 1) PAGEREF _Toc229289936 \h 10
HYPERLINK \l "_Toc229289937" Design, Method, and Procedure PAGEREF _Toc229289937 \h 10
HYPERLINK \l "_Toc229289938" Results PAGEREF _Toc229289938 \h 12
HYPERLINK \l "_Toc229289939" DEVELOPING A MANIPULATION OF OUTCOME (Pretest 2) PAGEREF _Toc229289939 \h 14
HYPERLINK \l "_Toc229289940" Design, Method, and Procedure PAGEREF _Toc229289940 \h 14
HYPERLINK \l "_Toc229289941" Results PAGEREF _Toc229289941 \h 15
HYPERLINK \l "_Toc229289942" DEMONSTRATION OF RELATIVE ATTRIBUTE IMPORTANCE IN DIFFERENT USAGE CONTEXTS PAGEREF _Toc229289942 \h 16
HYPERLINK \l "_Toc229289943" Design, Method, and Procedure PAGEREF _Toc229289943 \h 16
HYPERLINK \l "_Toc229289944" STUDY 1 PAGEREF _Toc229289944 \h 18
HYPERLINK \l "_Toc229289945" Method, Design and Procedure PAGEREF _Toc229289945 \h 18
HYPERLINK \l "_Toc229289946" Results PAGEREF _Toc229289946 \h 20
HYPERLINK \l "_Toc229289947" STUDY 2 PAGEREF _Toc229289947 \h 30
HYPERLINK \l "_Toc229289948" Design, Method, and Procedure PAGEREF _Toc229289948 \h 31
HYPERLINK \l "_Toc229289949" Results PAGEREF _Toc229289949 \h 32
HYPERLINK \l "_Toc229289950" STUDY 3 PAGEREF _Toc229289950 \h 38
HYPERLINK \l "_Toc229289951" Design, Method, and Procedure PAGEREF _Toc229289951 \h 38
HYPERLINK \l "_Toc229289952" Results PAGEREF _Toc229289952 \h 39
HYPERLINK \l "_Toc229289953" GENERAL DISCUSSION PAGEREF _Toc229289953 \h 48
HYPERLINK \l "_Toc229289954" APPENDIX 1 PAGEREF _Toc229289954 \h 51
HYPERLINK \l "_Toc229289955" APPENDIX 2 PAGEREF _Toc229289955 \h 52
HYPERLINK \l "_Toc229289956" APPENDIX 3 PAGEREF _Toc229289956 \h 53
HYPERLINK \l "_Toc229289957" APPENDIX 4 PAGEREF _Toc229289957 \h 54
HYPERLINK \l "_Toc229289958" APPENDIX 5 PAGEREF _Toc229289958 \h 55
HYPERLINK \l "_Toc229289959" REFERENCES PAGEREF _Toc229289959 \h 56
LIST OF TABLES
Table 1: Importance of Camera Attributes by Usage Context 17
Table 2: Logistic Regression Results (Study 1) 21
Table 3: Relative Brand Share by Condition (Study 1) 27
Table 4: Logistic Regression Results (Study 2) 33
Table 5: Logistic Regression Results (Study 3) 41
Table 6: Attribute Combinations Employed in Study 3 45
Table 7: Relative Selection of Attribute Combinations (Study 3) 46
LIST OF FIGURES
Figure 1: Satisfaction with Outcome (Pretest 2) 15
Figure 2: Repurchase Rates (Study 1) 22
Figure 3a: Repurchase Rates: Similar Contexts (Study 1) 24
Figure 3b: Repurchase Rates: Dissimilar Contexts (Study 1) 24
Figure 4: Satisfaction (Study 1) 29
Figure 5: Repurchase Rates by Uncertainty Condition (Study 2) 34
Figure 6: Repurchase Rates by Outcome x Consequentiality (Study 2) 35
Figure 7: Satisfaction (Study 2) 36
Figure 8: Repurchase Rates by Uncertainty Condition (Study 3) 41
Figure 9a: Repurchase Rates: Similar Contexts (Study 3) 43
Figure 9b: Repurchase Rates: Dissimilar Contexts (Study 3) 43
This research considers possible effects of pre-choice uncertainty on post-choice behaviors. Specifically, we focus situations in which uncertainty is generated by conditions of missing information about product attributes such that future outcomes of the choice are unclear. Further, we consider whether the level of experienced uncertainty will affect (a) the likelihood that decision-makers repeat the same purchase vs. switch to a different product on a subsequent choice occasion and (b) the nature of any switching behavior.
The fact that customers make choices even when they are uncertain about which choice to make is well recognized in the field of consumer behavior. Consumer decision making is often steeped in uncertainty ADDIN EN.CITE Tversky1992363617Tversky, AmosShafir, EldarThe disjunction effect in choice under uncertaintyPsychological SciencePsychological Science305-3093Septemberdisjunction effect in decision making under uncertainty, college studentsDecision MakingUncertaintyMost decisions are made in the presence of uncertainty1992United KingdomBlackwell Publishing10.1111/j.1467-9280.1992.tb00678.xhttp://ezproxy.lib.uh.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=psyh&AN=1993-08327-001&site=ehost-live (Tversky and Shafir 1992) which may be due to incomplete or imprecise information about focal products or services ADDIN EN.CITE Dick199026526517Dick, AlanChakravarti, DipankarBiehal, GabrielMemory-Based Inferences During Consumer ChoiceJournal of Consumer ResearchJournal of Consumer Research82-93171CONSUMERS' preferencesCONSUMER behaviorBRAND choiceCONSUMERSBRAND name productsPRODUCT attributesCORRELATION (Statistics)ANALYSIS of varianceMEMORYINFERENCEMETHODOLOGY1990Journal of Consumer Research, Inc.http://ezproxy.lib.uh.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=4656671&site=ehost-live Johnson198526626617Johnson, Richard D.Levin, Irwin P.More than Meets the Eye: The Effect of Missing Information on Purchase EvaluationsJournal of Consumer ResearchJournal of Consumer Research169-177122PURCHASINGINFORMATION resourcesMARKETING researchCOMMERCIAL productsBUSINESS planningPRICINGQUALITY of productsMARKET segmentationMARKETING strategySTRATEGIC planningPRODUCT attributesEVALUATION1985Journal of Consumer Research, Inc.http://ezproxy.lib.uh.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=4662255&site=ehost-live Kivetz200026726717Kivetz, RanSimonson, ItamarThe Effects of Incomplete Information on Consumer ChoiceJournal of Marketing Research (JMR)Journal of Marketing Research (JMR)427-448374INTERNET marketingCONSUMERSDECISION makingCONSUMERS' preferencesCONSUMER behaviorMARKETING researchINFORMATION overloadTRENDSATTRIBUTE (Philosophy)INFERENCE2000American Marketing Associationhttp://ezproxy.lib.uh.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=4086757&site=ehost-live Ross199226826817Ross, William T.Creyer, Elizabeth H.Making Inference about Missing Information: The Effects of Existing InformationJournal of Consumer ResearchJournal of Consumer Research14-25191CONSUMERS' preferencesCONSUMERSBRAND name productsCONSUMER behaviorDECISION makingCONSUMERS -- ResearchKNOWLEDGE-based theory of the firmKNOWLEDGE, Theory ofINFERENCEATTRIBUTE (Philosophy)KNOWLEDGE baseCHOICE (Psychology)1992Journal of Consumer Research, Inc.http://ezproxy.lib.uh.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=9305115093&site=ehost-live Simmons199130630617Simmons, Carolyn J.Lynch, John G.Inference Effects without Inference Making? Effects of Missing Information on Discounting and Use of Presented InformationJournal of Consumer ResearchJournal of Consumer Research477-491174COMMERCIAL productsCONSUMERS' preferencesPRODUCT attributesBRAND choiceBRAND name productsECONOMETRIC modelsPRODUCT managementEMPIRICAL researchCORRELATION (Statistics)MATHEMATICAL modelsINFERENCEMETA-analysis1991Journal of Consumer Research, Inc.http://ezproxy.lib.uh.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=4657225&site=ehost-live (Dick, Chakravarti, and Biehal 1990; Johnson and Levin 1985; Kivetz and Simonson 2000; Ross and Creyer 1992; Simmons and Lynch 1991). Such issues inhibit the formation of outcome expectancies ADDIN EN.CITE Mishra200825625617Mishra, HimanshuShiv, BabaNayakankuppam, DhananjayThe Blissful Ignorance Effect: Pre- versus Post-action Effects on Outcome Expectancies Arising from Precise and Vague InformationJournal of Consumer ResearchJournal of Consumer Research573-5853542008http://ezproxy.lib.uh.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=35676744&site=ehost-live (Mishra, Shiv, and Nayakankuppam 2008) leaving the consumer largely in the dark regarding what to expect as a result of actions taken. Many authors have considered how consumers enable themselves to act in these circumstances. For example, prior research has provided evidence of variable levels of search ADDIN EN.CITE Urbany198912312317Urbany, Joel E.Dickson, Perer R.Wilkie, William L.Buyer Uncertainty and Information SearchJournal of Consumer ResearchJournal of Consumer Research208-21516September1989(Urbany, Dickson, and Wilkie 1989), increased reliance on choice heuristics ADDIN EN.CITE Kahneman198214014028Kahneman, DanielSlovic, PaulTversky, AmosJudgment under Uncertainty: Heuristics and BiasesJudgment under Uncertainty1982New YorkCambridge University Press(Kahneman, Slovic, and Tversky 1982), inference-making about missing values ADDIN EN.CITE Dick199026526517Dick, AlanChakravarti, DipankarBiehal, GabrielMemory-Based Inferences During Consumer ChoiceJournal of Consumer ResearchJournal of Consumer Research82-93171CONSUMERS' preferencesCONSUMER behaviorBRAND choiceCONSUMERSBRAND name productsPRODUCT attributesCORRELATION (Statistics)ANALYSIS of varianceMEMORYINFERENCEMETHODOLOGY1990Journal of Consumer Research, Inc.http://ezproxy.lib.uh.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=4656671&site=ehost-live Huber198227027017Huber, JoelMcCann, JohnThe Impact of Inferential Beliefs on Product EvaluationsJournal of Marketing Research (JMR)Journal of Marketing Research (JMR)324-333193CONSUMER behaviorRESEARCHCONSUMERS' preferencesBRAND choiceCONSUMERS -- AttitudesCONSUMER goodsPRODUCT attributesCOMMERCIAL products -- MarketingADVERTISING -- Psychological aspectsCHOICE (Psychology)INFERENCE -- Psychological aspectsPSYCHOLOGICAL aspectsEVALUATIONREASONING1982American Marketing Associationhttp://ezproxy.lib.uh.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=5006313&site=ehost-live Ross199226826817Ross, William T.Creyer, Elizabeth H.Making Inference about Missing Information: The Effects of Existing InformationJournal of Consumer ResearchJournal of Consumer Research14-25191CONSUMERS' preferencesCONSUMERSBRAND name productsCONSUMER behaviorDECISION makingCONSUMERS -- ResearchKNOWLEDGE-based theory of the firmKNOWLEDGE, Theory ofINFERENCEATTRIBUTE (Philosophy)KNOWLEDGE baseCHOICE (Psychology)1992Journal of Consumer Research, Inc.http://ezproxy.lib.uh.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=9305115093&site=ehost-live Ross199226826817Ross, William T.Creyer, Elizabeth H.Making Inference about Missing Information: The Effects of Existing InformationJournal of Consumer ResearchJournal of Consumer Research14-25191CONSUMERS' preferencesCONSUMERSBRAND name productsCONSUMER behaviorDECISION makingCONSUMERS -- ResearchKNOWLEDGE-based theory of the firmKNOWLEDGE, Theory ofINFERENCEATTRIBUTE (Philosophy)KNOWLEDGE baseCHOICE (Psychology)1992Journal of Consumer Research, Inc.http://ezproxy.lib.uh.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=9305115093&site=ehost-live (Dick et al. 1990; Huber and McCann 1982; Ross and Creyer 1992), and differential employment of decision strategies ADDIN EN.CITE Dhar199630730717Dhar, RaviThe Effect of Decision Strategy on Deciding to Defer ChoiceJournal of Behavioral Decision MakingJournal of Behavioral Decision Making265-28194DECISION makingUNCERTAINTYCONSUMER behaviorCONSUMERS -- AttitudesCHOICE (Psychology)choice difficultyconflictdecision makingdecision strategy1996John Wiley & Sons, Inc. / Businesshttp://ezproxy.lib.uh.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=16567451&site=ehost-live (Dhar 1996b) in response to such uncertainty. This research has largely focused on the relationship between pre-choice uncertainty and pre-choice phenomena or the relationship between pre-choice uncertainty and the choice itself. There has been less focus on the relationship between pre-choice uncertainty and post-choice phenomena such as switching behavior.
The relationship between pre-choice uncertainty and post-choice phenomena is of substantial interest, not only in light of growing academic interest in sequential decisions, but also because of practical marketing considerations. Repeat purchasing vs. switching is a central factor driving customer profitability. Given what we know from prior literature, the specific implications of pre-choice uncertainty for subsequent choice behaviors are not at all clear. One might speculate that there will be no relationship, either because (a) choice is a watershed moment, such that prior uncertainty becomes irrelevant once a choice is made, or (b) the proof of the pudding is in the eating, such that post-choice product performance outcomes overwhelm pre-choice uncertainty as a determinant of subsequent choices. In other words, the question of whether pre-choice uncertainty even survives the act of choosing and/or the realization of an outcome is an open issue.
Alternatively, an argument can be made for the potentially beneficial influence of the Blissful Ignorance Effect proposed by ADDIN EN.CITE Mishra200825625617Mishra, HimanshuShiv, BabaNayakankuppam, DhananjayThe Blissful Ignorance Effect: Pre- versus Post-action Effects on Outcome Expectancies Arising from Precise and Vague InformationJournal of Consumer ResearchJournal of Consumer Research573-5853542008http://ezproxy.lib.uh.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=35676744&site=ehost-live (Mishra et al. 2008) in which vague information leads to more optimistic expectations and affords decision-makers the flexibility to interpret outcomes more favorably. Additionally, missing information has been shown to alter consumer preference in favor of an initially-selected alternative ADDIN EN.CITE Kivetz200026726717Kivetz, RanSimonson, ItamarThe Effects of Incomplete Information on Consumer ChoiceJournal of Marketing Research (JMR)Journal of Marketing Research (JMR)427-448374INTERNET marketingCONSUMERSDECISION makingCONSUMERS' preferencesCONSUMER behaviorMARKETING researchINFORMATION overloadTRENDSATTRIBUTE (Philosophy)INFERENCE2000American Marketing Associationhttp://ezproxy.lib.uh.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=4086757&site=ehost-live (Kivetz and Simonson 2000). These findings might argue for higher likelihood of repurchase. On the other hand, enhanced expectations may be more likely to be negatively disconfirmed ADDIN EN.CITE Spreng199618018017Spreng, Richard A.MacKenzie, Scott B.Olshavsky, Richard W.A reexamination of the determinants of consumer satisfactionJournal of MarketingJournal of Marketing15-32603model of consumer satisfaction formation, assessment of perceived performance & desires & expectations congruency & attribute & information & overall satisfaction, 18-65 yr olds & olderAttitude FormationConsumer SatisfactionExpectationsModelsPreferences1996USAmerican Marketing Association10.2307/1251839http://ezproxy.lib.uh.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=psyh&AN=1996-05329-002&site=ehost-live (Spreng, MacKenzie, and Olshavsky 1996) and missing information often yields lower product evaluations ADDIN EN.CITE Huber198227027017Huber, JoelMcCann, JohnThe Impact of Inferential Beliefs on Product EvaluationsJournal of Marketing Research (JMR)Journal of Marketing Research (JMR)324-333193CONSUMER behaviorRESEARCHCONSUMERS' preferencesBRAND choiceCONSUMERS -- AttitudesCONSUMER goodsPRODUCT attributesCOMMERCIAL products -- MarketingADVERTISING -- Psychological aspectsCHOICE (Psychology)INFERENCE -- Psychological aspectsPSYCHOLOGICAL aspectsEVALUATIONREASONING1982American Marketing Associationhttp://ezproxy.lib.uh.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=5006313&site=ehost-live Levin198827127117Levin, Irwin P.Chapman, Daniel P.Johnson, Richard D.Confidence in Judgments Based on Incomplete Information: An Investigation Using Both Hypothetical and Real GamblesJournal of Behavioral Decision MakingJournal of Behavioral Decision Making29-4111PROBABILITIESDECISION makingCONFIDENCEJUDGMENTINFERENCEConfidence in judgmentsFraming effectsInferencesRisky decision making1988John Wiley & Sons, Inc. / Businesshttp://ezproxy.lib.uh.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=16564867&site=ehost-live Simmons199226926917Simmons, Carolyn J.Lynch, John G.Contingent inference makingAdvances in Consumer ResearchAdvances in Consumer Research409191CONSUMERS1992Association for Consumer Researchhttp://ezproxy.lib.uh.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=9301106552&site=ehost-live (Huber and McCann 1982; Levin, Chapman, and Johnson 1988; Simmons and Lynch 1992), findings that might forecast a lower likelihood of repurchase.
Given this lack of resolution, the current research seeks to enhance our understanding of the post-choice influence of uncertainty due to missing information about product attributes. We consider the fundamental question of whether the influence of pre-choice uncertainty extends into the post-choice period. In particular, we evaluate the influence of such uncertainty on the likelihood that repurchase will take place. Further, we examine the nature of that influence in terms of the specific selection patterns that emerge.
This paper proceeds as follows. In the next section, we provide a brief description of a focal construct of this research, outcome uncertainty, and distinguish it from related constructs. A series of hypotheses is developed regarding the posited influences of such uncertainty on the likelihood of repurchase. Findings from three experimental studies are then presented. Limitations of the research are indicated and the paper concludes with a discussion of theoretical and managerial implications of the findings.
CONCEPTUALIZATION OF OUTCOME UNCERTAINTY
In this research, we define outcome uncertainty as a psychological state in which the decision-maker possesses incomplete knowledge of the relationship between actions and outcomes ADDIN EN.CITE Downey197510210217Downey, H. KirkSlocum, John W.Uncertainty: Measures, Research, and Sources of VariationThe Academy of Management JournalThe Academy of Management Journal562-57818Septemberuncertaintyuncertainty measures19752008/2/6(Downey and Slocum 1975). This definition implies the inherently subjective nature of outcome uncertainty ADDIN EN.CITE Keynes192131431444Keynes, John MaynardA Treatise on Probability1921April 16, 2009St. Martin's Street, LondonMacMillan and Co. Limitedhttp://books.google.com/books?id=6DUJAAAAIAAJ&dq=keynes+a+treatise+on+probability&printsec=frontcover&source=bl&ots=yvltBWdthC&sig=3ag2zGoHL23zamDTNrxB0nyDUIM&hl=en&ei=-lbnSfvNGYnKtgfSx7nWBQ&sa=X&oi=book_result&ct=result&resnum=1(Keynes 1921), stressing that it is an individually-determined and experienced state that can be influenced by the decision context. In conceptualizing outcome uncertainty in this fashion, we distinguish it from several related constructs as discussed below.
Ambiguity has been conceived as a vagueness, lack of clarity, or imprecision in information or held knowledge ADDIN EN.CITE Ellsberg196127227217Ellsberg, DanielRisk, Ambiguity, and the Savage AxiomsQuarterly Journal of EconomicsQuarterly Journal of Economics643-669754UNCERTAINTYPROBABILITIESRISKECONOMICSCHOICE (Psychology)AXIOMS1961MIT Presshttp://ezproxy.lib.uh.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=12607364&site=ehost-live Heath199127327317Heath, ChipTversky, AmosPreference and Belief: Ambiguity and Competence in Choice under UncertaintyJournal of Risk & UncertaintyJournal of Risk & Uncertainty5-2841PROBABILITIESCORRELATION (Statistics)PERFORMANCEREASONINGAVERSIONSEMANTICSambiguitypreferencesuncertainty1991Springer Science & Business Media B.V.http://ezproxy.lib.uh.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=16628213&site=ehost-live Kleindorfer200827427417Kleindorfer, Paul R.Reflections on Decision Making under UncertaintyINSEAD Working Papers CollectionINSEAD Working Papers Collection1-2673DECISION makingDECISION theoryUNCERTAINTYTHEORYREASONING2008INSEADhttp://ezproxy.lib.uh.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=35904091&site=ehost-live (Ellsberg 1961; Heath and Tversky 1991; Kleindorfer 2008). It has also been considered as synonymous with missing information ADDIN EN.CITE Frisch198827827817Frisch, DeborahBaron, JonathanAmbiguity and RationalityJournal of Behavioral Decision MakingJournal of Behavioral Decision Making149-15713DECISION makingPROBABILITIESRATIONAL choice theoryAMBIGUITYREASONCHOICE (Psychology)AmbiguityRationalitySavage axioms1988John Wiley & Sons, Inc. / Businesshttp://ezproxy.lib.uh.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=16566637&site=ehost-live van Dijk2003373717van Dijk, EricZeelenberg, Marcelvan Dijk, Eric, Department of Social and Organizational Psychology, Leiden University, PO Box 9555, NL-2300 RB, Leiden, Netherlands, DIJK@fsw.leidenuniv.nlThe discounting of ambiguous information in economic decision makingJournal of Behavioral Decision MakingJournal of Behavioral Decision Making341-352165ambiguitysunk costsdecouplingdisjunction effecteconomic decision makingCosts and Cost AnalysisDecision MakingEconomics2003USJohn Wiley & SonsDIJK@fsw.leidenuniv.nl10.1002/bdm.450http://ezproxy.lib.uh.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=psyh&AN=2003-10975-002&site=ehost-live Mishra200825625617Mishra, HimanshuShiv, BabaNayakankuppam, DhananjayThe Blissful Ignorance Effect: Pre- versus Post-action Effects on Outcome Expectancies Arising from Precise and Vague InformationJournal of Consumer ResearchJournal of Consumer Research573-5853542008http://ezproxy.lib.uh.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=35676744&site=ehost-live (Frisch and Baron 1988; Mishra et al. 2008; van Dijk and Zeelenberg 2003). As such, ambiguity is conceived of as a characteristic of knowledge or information rather than a psychological state experienced by an individual and is thus distinguishable from outcome uncertainty. However, it is likely that ambiguity will give rise to uncertainty.
Outcome uncertainty is also distinct from preference uncertainty which relates to unclear or unknown personal valuation of attributes or alternatives ADDIN EN.CITE Savage19541541546Savage, Leonard J.The foundations of statisticsTEXTBOOKS, STATISTICSSTATISTICS, TEXTBOOKSTATISTICSNo terms assigned1954Oxford, EnglandJohn Wiley & Sonshttp://ezproxy.lib.uh.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=psyh&AN=1955-00117-000&site=ehost-live March197831031017March, James G.Bounded rationality, ambiguity, and the engineering of choiceBell Journal of EconomicsBell Journal of Economics587-60892RATIONAL choice theoryDECISION makingWELFARE economicsCHOICE (Psychology)SOCIAL choice1978http://ezproxy.lib.uh.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=5748558&site=ehost-live Simonson1989797917Simonson, ItamarChoice Based on Reasons: The Case of Attraction and Compromise EffectsJournal of Consumer ResearchJournal of Consumer Research158-174162BRAND choiceBRAND name productsCONSUMER behaviorCONSUMERS -- ResearchDECISION makingPSYCHOLOGYCOGNITIONSELF-esteem1989Journal of Consumer Research, Inc.http://ezproxy.lib.uh.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=4662451&site=ehost-live (March 1978; Savage 1954; Simonson 1989) rather than a lack of knowledge about the connections between potential actions and eventual outcomes.
Outcome uncertainty can also be distinguished from Knightian risk in which the exact outcome to be obtained from any given action is not known in advance but there is a known probability distribution of observable outcomes ADDIN EN.CITE Knight19212792796Knight, Frank H.Risk, Uncertainty, and Profit1921Boston and New York: Hart, Schaffner, and Marx Prize EssaysHoughton MifflinLibrary of Economics and Liberty [Online] available from http://www.econlib.org/library/Knight/knRUP1.html; accessed 3 April 2009; Internet. (Knight 1921). In contrast, outcome uncertainty does not imply that all outcomes are known or observable. However, outcome uncertainty is less distinguishable from Knightian uncertainty, which asserts that probability distributions of outcomes either are not or cannot be known ADDIN EN.CITE Knight19212792796Knight, Frank H.Risk, Uncertainty, and Profit1921Boston and New York: Hart, Schaffner, and Marx Prize EssaysHoughton MifflinLibrary of Economics and Liberty [Online] available from http://www.econlib.org/library/Knight/knRUP1.html; accessed 3 April 2009; Internet. (Knight 1921). Also, while outcome uncertainty may be distinguishable from risk, it is likely that increased risk (increased variance of outcomes) will give rise to higher uncertainty.
Finally, despite the non-unified definition and broad scope of cognitive dissonance ADDIN EN.CITE Aronson199228128117Aronson, ElliotThe Return of the Repressed: Dissonance Theory Makes a ComebackPsychological InquiryPsychological Inquiry30334COGNITIVE dissonanceSOCIAL psychology1992Lawrence Erlbaum Associateshttp://ezproxy.lib.uh.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=7402384&site=ehost-live Kunda199228228217Kunda, ZivaCan Dissonance Theory Do It All?Psychological InquiryPsychological Inquiry33734MOTIVATION (Psychology)COGNITIVE dissonanceARONSON, Elliot1992Lawrence Erlbaum Associateshttp://ezproxy.lib.uh.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=7402415&site=ehost-live Kruglanski199228328317Kruglanski, Arie W.To Carry the Synthesis a Little FurtherPsychological InquiryPsychological Inquiry33434COGNITIVE dissonanceCOGNITIONARONSON, Elliot1992Lawrence Erlbaum Associateshttp://ezproxy.lib.uh.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=7402412&site=ehost-live Lord199228428417Lord, Charles G.Was Cognitive Dissonance Theory a Mistake?Psychological InquiryPsychological Inquiry33934COGNITIVE dissonanceSOCIAL psychologyARONSON, Elliot1992Lawrence Erlbaum Associateshttp://ezproxy.lib.uh.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=7402419&site=ehost-live (Aronson 1992; Kruglanski 1992; Kunda 1992; Lord 1992), outcome uncertainty can be distinguished from this construct in the following fashion. Whereas cognitive dissonance asserts conflict between held beliefs and actions ADDIN EN.CITE Festinger19571581586Festinger, LeonA theory of cognitive dissonanceNo terms assigned1957Oxford, EnglandRow, Petersonhttp://ezproxy.lib.uh.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=psyh&AN=1957-15010-000&site=ehost-live (Festinger 1957), outcome uncertainty does not assert any such incongruence. Rather outcome uncertainty is concerned only with the inability to accurately predict future outcomes of present actions.
In the next section we make a series of propositions regarding the direct and indirect influence of outcome uncertainty on the likelihood of repurchase and also on the nature of that influence.
THE INLFUENCE OF MISSING INFORMATION
The Influence of Missing Information on Outcome Uncertainty. Prior research has shown that choice-relevant product information influences peoples expectations regarding the outcomes that a focal item will generate ADDIN EN.CITE Boulding199331531517Boulding, WilliamKalra, AjayStaelin, RichardZeithaml, Valarie A.A Dynamic Process Model of Service Quality: From Expectations to Behavioral IntentionsJournal of Marketing Research (JMR)Journal of Marketing Research (JMR)7-27301BAYESIAN statistical decision theoryQUALITY of serviceCUSTOMER servicesCONSUMER behaviorRESEARCHCONSUMERS -- AttitudesCUSTOMER relationship managementEXPECTATION (Psychology)STATISTICAL decisionCONSUMER satisfactionEVALUATIONBEHAVIORAL assessment1993American Marketing Associationhttp://ezproxy.lib.uh.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=9511203691&site=ehost-live (Boulding et al. 1993). This implies that the absence of relevant information may hinder formation of such expectations, resulting in uncertainty regarding future outcomes. Because attribute-level product information is highly relevant to the choice, it follows that consumers should be less able to form firm expectations about future outcomes when such information is missing than when it is present. This then suggests that the unobservable state of uncertainty regarding an inability to predict outcomes should be more likely to manifest in choice situations characterized by missing information than in those characterized by full information. This leads to proposition 1.
P1: Missing attribute information will be associated with higher levels of reported outcome uncertainty.
Direct Influence on Repurchase. Uncertainty threatens two core motives that drive human affect, cognition, and behavior, the motives to understand and control ones environment ADDIN EN.CITE Fiske20082302305Fiske, Susan T.Shah, James Y.Gardner, Wendi L.Core social motivations: Views from the couch, consciousness, classroom, computers, and collectivesHandbook of motivation science.3-22social motivationspsychological sciencemotiveshistoryHistory of PsychologyMotivationSocial Behavior2008New York, NY, USGuilford Presshttp://ezproxy.lib.uh.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=psyh&AN=2008-00543-001&site=ehost-live (Fiske, Shah, and Gardner 2008). As such, people find uncertainty aversive ADDIN EN.CITE Camerer199228628617Camerer, ColinWeber, MartinRecent Developments in Modeling Preferences: Uncertainty and AmbiguityJournal of Risk & UncertaintyJournal of Risk & Uncertainty325-37054PROBABILITIESRESEARCHAMBIGUITYSEMANTICSREASONINGEVIDENCEambiguityEllsberg paradoxnonexpected utilityuncertainty1992Springer Science & Business Media B.V.http://ezproxy.lib.uh.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=16619070&site=ehost-live (Camerer and Weber 1992) and tend to avoid situations characterized by it ADDIN EN.CITE Ellsberg196127227217Ellsberg, DanielRisk, Ambiguity, and the Savage AxiomsQuarterly Journal of EconomicsQuarterly Journal of Economics643-669754UNCERTAINTYPROBABILITIESRISKECONOMICSCHOICE (Psychology)AXIOMS1961MIT Presshttp://ezproxy.lib.uh.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=12607364&site=ehost-live (Ellsberg 1961). Uncertainty about future outcomes of past actions, specifically, has been posited to lower the decision-makers sense of ownership in a given choice ADDIN EN.CITE Van Dijk200616716717Van Dijk, EricZeelenberg, MarcelVan Dijk, Eric, Department of Social and Organizational Psychology, Leiden University, 2300 RB, Leiden, Netherlands, Dijk@fsw.leidenuniv.nlThe Dampening Effect of Uncertainty on Positive and Negative EmotionsJournal of Behavioral Decision MakingThe Role of Affect in Decision MakingJournal of Behavioral Decision Making171-176192negative emotionspositive emotionsuncertaintyEmotional StatesUncertainty2006USJohn Wiley & SonsDijk@fsw.leidenuniv.nl10.1002/bdm.504http://ezproxy.lib.uh.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=psyh&AN=2006-05240-007&site=ehost-live (Van Dijk and Zeelenberg 2006) which supports the idea that people will avoid or distance themselves from choices associated with higher (vs. lower) levels of outcome uncertainty.
Because personal investment in an action is necessary for commitment to that action to ensue ADDIN EN.CITE Schoorman199628728717Schoorman, David F.Holahan, Patricia J.Psychological Antecedents of Escalation Behavior: Effects of Choice, Responsibility, and Decision ConsequencesJournal of Applied PsychologyJournal of Applied Psychology786-794816PSYCHOLOGYCOLLEGE studentsBEHAVIORCHOICE (Psychology)RESPONSIBILITYEXPLANATION1996http://ezproxy.lib.uh.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=12360397&site=ehost-live Festinger19571581586Festinger, LeonA theory of cognitive dissonanceNo terms assigned1957Oxford, EnglandRow, Petersonhttp://ezproxy.lib.uh.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=psyh&AN=1957-15010-000&site=ehost-live (Festinger 1957; Schoorman and Holahan 1996), we posit that the likelihood that a given action will be repeated will be negatively correlated with the level of outcome uncertainty experienced by the decision-maker. This leads to our first hypothesis.
H1: There will be a significant main effect of outcome uncertainty on the likelihood of repurchase such that repurchase will be less likely when the level of experienced uncertainty is higher.
Indirect Influence on Repurchase. Prior research asserts that people learn their preferences by taking actions and observing the resulting outcomes ADDIN EN.CITE Eisenstein200628928917Eisenstein, Eric M.Hutchinson, J. WesleyAction-Based Learning: Goals and Attention in the Acquisition of Market KnowledgeJournal of Marketing Research (JMR)Journal of Marketing Research (JMR)244-258432DECISION makingRESEARCHMOTIVATION (Psychology)CONSUMER behaviorCONSUMERS -- AttitudesCONSUMERS' preferencesBRAND choiceACTIVE learningEXPERIENTIAL learningFEEDBACK (Psychology)GOAL (Psychology)LEARNING2006American Marketing Associationhttp://ezproxy.lib.uh.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=20949385&site=ehost-live (Eisenstein and Hutchinson 2006). Amir and Levav (2008) found evidence of heightened learning in the absence of choice-facilitating cues that tell the decision-maker what to select. An example of such a cue is a dominant alternative in a given choice set. While the absence of a choice-facilitating cue is likely to result in higher levels of experienced uncertainty, we also anticipate that it will lead to increased learning. Further, the focus of this increased learning is expected to be on the relationship between the choice action that is taken and the resultant outcome. This increased focus on the choice outcome is expected to amplify the influence that outcome exerts on the likelihood of repurchase. This is formally stated in hypothesis 2, below.
H2: There will be a significant interaction of uncertainty level and outcome such that the effect of outcome on the likelihood of repurchase will be greater under higher (vs. lower) levels of uncertainty.
Prior research has shown that similarity (vs. dissimilarity) of sequential decisions facilitates transference of knowledge and information between them ADDIN EN.CITE van Putten200729129117van Putten, MarijkeZeelenberg, Marcelvan Dijk, EricDecoupling the past from the present attenuates inaction inertiaJournal of Behavioral Decision MakingJournal of Behavioral Decision Making65-79201DECISION makingPSYCHOLOGYCHOICE (Psychology)JUDGMENTBOUNDARY value problemsinaction inertiamental accountingtransaction decoupling2007John Wiley & Sons, Inc. / Business10.1002/bdm.541http://ezproxy.lib.uh.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=23527681&site=ehost-live Novemsky200713613617Novemsky, NathanDhar, RaviSchwarz, NorbertSimonson, ItamarPreference Fluency in ChoiceJournal of Marketing ResearchJournal of Marketing Research347-35646August2007Novemsky200713613617Novemsky, NathanDhar, RaviSchwarz, NorbertSimonson, ItamarPreference Fluency in ChoiceJournal of Marketing ResearchJournal of Marketing Research347-35646August2007(Novemsky et al. 2007; van Putten, Zeelenberg, and van Dijk 2007). This suggests that the effect posited in hypothesis 2 will be more pronounced when the contexts of sequential decisions are similar than when they are dissimilar.
H2a: The increased influence of outcome under conditions of higher uncertainty, posited in hypothesis 2, will be more pronounced when similarity between usage contexts is higher (vs. lower).
RESEARCH OBJECTIVES AND EMPIRICAL STRATEGY
Our empirical strategy was as follows. All of our research was conducted in the general context of choosing a digital camera. Dhar ADDIN EN.CITE Dhar1997101017Dhar, RaviConsumer Preference for a No-Choice OptionJournal of Consumer ResearchJournal of Consumer Research215-23124Septemberpreferencepreference uncertaintydeferchoice deferraldecision deferraltrade-off19972007/10/15(1997) and Novemsky et al. ADDIN EN.CITE Novemsky200713613617Novemsky, NathanDhar, RaviSchwarz, NorbertSimonson, ItamarPreference Fluency in ChoiceJournal of Marketing ResearchJournal of Marketing Research347-35646August2007(2007) have used this product category to study the relationship between consumer uncertainty and the likelihood of choice deferral, and measures captured in Study 3, showed that all of the participants who participated in that study owned such a product.
We conducted research to develop manipulations to use in our hypothesis testing. First, we conducted a pretest modeled on Dhar ADDIN EN.CITE Dhar1997101017Dhar, RaviConsumer Preference for a No-Choice OptionJournal of Consumer ResearchJournal of Consumer Research215-23124Septemberpreferencepreference uncertaintydeferchoice deferraldecision deferraltrade-off19972007/10/15(1997) to confirm that we could instantiate uncertainty in an experimental setting. Second, we conducted another pretest to develop an effective manipulation of better vs. worse outcomes. Third, we measured the relative importance of different camera attributes in different usage contexts to confirm that our manipulation of usage context was effective.
Given the manipulations that we developed, we conducted three studies to test our hypotheses. Study 1 evaluates hypotheses 1, 2, and 2a. Study 2 largely replicates Study 1 with an added test to evaluate the influence of uncertainty under different levels of choice consequentiality. Study 3 evaluates the hypotheses but employs a counterbalanced design to confirm that the results are not attributable to order effects. The results of these studies are reported in the next sections.
DEVELOPING A MANIPULATION OF UNCERTAINTY (Pretest 1)
The objective of Pretest 1 was to evaluate the effectiveness of the uncertainty manipulation we plan to use in this research. We do so by adapting a research paradigm employed by Dhar ADDIN EN.CITE Dhar1997101017Dhar, RaviConsumer Preference for a No-Choice OptionJournal of Consumer ResearchJournal of Consumer Research215-23124Septemberpreferencepreference uncertaintydeferchoice deferraldecision deferraltrade-off19972007/10/15(1997) to instantiate uncertainty.
Design, Method, and Procedure
One hundred ninety-four undergraduate business students participated in an online study in exchange for partial course credit. Participants were randomly assigned to conditions in a 3 (information availability: complete information, aligned missing information, misaligned missing information) X 2 (forced choice vs. option to defer), 6-cell, between subjects design. The complete information (CI) condition was similar to that used by Dhar ADDIN EN.CITE Dhar1997101017Dhar, RaviConsumer Preference for a No-Choice OptionJournal of Consumer ResearchJournal of Consumer Research215-23124Septemberpreferencepreference uncertaintydeferchoice deferraldecision deferraltrade-off19972007/10/15(1997) and displayed attribute-level product ratings for two digital cameras presented in a table format. In the aligned missing information condition (AMI), some of the attribute information was missing for both alternatives. In the missing misaligned information (MMI) condition, different alternatives were missing different information. See Appendix 1. Based on prior literature, missing information should cause higher uncertainty (vs. complete information) if misaligned, but not necessarily if aligned, because aligned missing information allows decision makers pay less attention to common features (e.g. missing information) and focus on what is available ADDIN EN.CITE Dhar199612912917Dhar, RaviSherman, Steven J.The Effect of Common and Unique Features in Consumer ChoiceJournal of Consumer ResearchJournal of Consumer Research193-20323December1996(Dhar and Sherman 1996). Likewise, based on findings from prior research ADDIN EN.CITE Dhar1997101017Dhar, RaviConsumer Preference for a No-Choice OptionJournal of Consumer ResearchJournal of Consumer Research215-23124Septemberpreferencepreference uncertaintydeferchoice deferraldecision deferraltrade-off19972007/10/15(Dhar 1997), we speculated that being forced to make a choice might heighten the experience of uncertainty. In order to evaluate the influence of forced vs. non-forced choice, one half of the participants were afforded an option to defer choice while the other was not.
We employed a scenario that was similar in structure to that used by Dhar ADDIN EN.CITE Dhar199613413417Dhar, RaviContext and Task Effects on Choice DeferralMarketing LettersMarketing Letters119-130811996(1996a). The scenario was about the purchase of a digital camera. Participants were told, Imagine that youve recently decided to purchase a new digital camera. With it youll be able to capture beautiful images and wonderful memories. Within each uncertainty level condition, participants viewed a choice set featuring two cameras that were available (one by Nikon and one by Pentax) (see Appendix 1). Each was available at a sale price that would expire that day. Alternatives were described by a list of features that had been rated on a 100-point scale with higher numbers reflecting better ratings.
Following stimulus presentation, participants in the option to defer condition responded to a choice prompt of, What would you do? which was followed by three options: Buy the Nikon, Buy the Pentax, and Select neither camera at this time. In the forced choice condition, the deferral option was omitted.
Following selection (or deferral), participants indicated how certain they felt about their choice via two reverse-coded closed-end measures adapted from ADDIN EN.CITE Zakay199315515517Zakay, DanTsal, YehoshuaThe impact of using forced decision-making strategies on post-decisional confidenceJournal of Behavioral Decision MakingJournal of Behavioral Decision Making53-6861compatible vs noncompatible forced decision making strategies, postdecisional confidence, male college students, IsraelDecision MakingStrategies1993USJohn Wiley & Sonshttp://ezproxy.lib.uh.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=psyh&AN=1993-28275-001&site=ehost-live (Zakay and Tsal 1993): I felt absolutely certain I knew which camera to select. and I felt completely confident in making a selection. Both items were measured using 7-point scales anchored by Strongly disagree (1) and Strongly agree (7). Lower numbers represent lower certainty (higher uncertainty). These measures capture the extent to which the decision-maker experienced uncertainty.
In addition, the nature of the experienced uncertainty was captured via three 7-point Likert scale items anchored by Strongly disagree (1) and Strongly agree (7). The items were: I did not have enough information about the cameras, I had information about the cameras, but I was not sure how that information translated into camera performance, I could translate the information into camera performance, but I was not sure of my own preferences for the different performance of each camera. Higher scores on the first item (insufficient information) in the high uncertainty condition would indicate that the manipulation was working as intended. Higher scores on the second item (unsure of how to translate information into camera performance) would serve as evidence of outcome uncertainty.
Results
To assess the presence of uncertainty following choice, we averaged the two certainty / confidence items (correlation = 0.84, p<.01) and performed an ANOVA on the resulting measure of average choice confidence. There was a significant main effect of availability of attribute-level information (F(2,174) = 41.11, p<.05) such that participants in the MMI condition reported higher levels of experienced uncertainty (M=2.7) than those in either the AMI condition (M=1.9, p<.05) or the CI condition (M=1.4, p<.05). Forced choice did not exert a significant influence on level of experienced uncertainty in this study. These results indicate that uncertainty can be instantiated in an experimental setting such as we employ in the current research.
ANOVA revealed a significant main effect of information availability on the likelihood of experiencing uncertainty related to insufficient information (F(2,189) = 8.04, p<.01). Participants in the MMI (M=5.3) and AMI (M=5.3) conditions were more likely to experience uncertainty due to a lack of information than those in the CI condition (M=4.2) (p<.01).
Our analysis did not reveal the significant main effect of information availability on inability to predict eventual outcomes that is proposed in proposition 1. However, analysis of the simple effects showed that participants in the MMI condition were significantly more likely to experience this form of uncertainty (M=3.8) than those in the CI condition (M=3.5) (p<.05). This suggested that the MMI condition generated more outcome-related uncertainty than the CI condition. The difference between the MMI and the AMI conditions was not significant. No other relationships were significant. From these findings, we elected to employ the MMI and the CI conditions in future studies to manipulate higher and lower levels of outcome-related uncertainty.
Notably, action volition (i.e. forced vs. non-forced contexts) did not exert a significant influence on the experience of uncertainty (F(1,189) = 0.06, p<.81). This suggested that forced choice contexts would be appropriate to evaluate our hypotheses regarding the influence of outcome uncertainty on repurchase. Given these encouraging results, we proceed to describe a pretest of an outcome manipulation.
DEVELOPING A MANIPULATION OF OUTCOME (Pretest 2)
In order to evaluate the influence of outcome uncertainty under varying outcomes, it is desirable to allow natural reactions (or the lack thereof) to manifest. To that end, in the second pretest we tested the effectiveness of an outcome manipulation that would allow for individual interpretation.
Design, Method, and Procedure
Fifty-six undergraduate business students participated in an online study in exchange for partial course credit. We first developed a set of six color pictures of Parisian scenes taken from various Internet sites. To create bad (vs. good) pictures, individual images were manipulated using Picasa software to blur, darken, and/or skew the images. See Appendix 2. Participants were randomly assigned to one of 7 conditions which corresponded to the number of poor quality pictures in a set of six. For example, in condition 1, there were 0 bad pictures out of 6. In condition 2, there was 1 bad picture out of 6, and so on, up to a maximum of 6 bad pictures out of 6.
Upon signing into the study, participants viewed one set of pictures and rated them in terms of how satisfied they would be with the set. Three 7-point semantic differential scales ADDIN EN.CITE Crosby198729629617Crosby, Lawrence A.Stephens, NancyEffects of Relationship Marketing on Satisfaction, Retention, and Prices in the Life Insurance IndustryJournal of Marketing Research (JMR)Journal of Marketing Research (JMR)404-411244RELATIONSHIP marketingCONSUMER satisfactionQUALITY of serviceCOMPETITIONPRICESINSURANCE companiesCUSTOMER relationsCUSTOMER relationship managementLIFE insurance companiesMARKETING strategy1987American Marketing Associationhttp://ezproxy.lib.uh.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=5004911&site=ehost-live (Crosby and Stephens 1987) were used to record satisfaction with the pictures. Each item was anchored at the low end by (1) and at the high end by (7). The items were: Dissatisfied / Satisfied; Unfavorable / Favorable; Unpleasant / Pleasant.
Results
The three satisfaction items were combined for analysis (( = .98). See Figure 1 for a graph of the results. ANOVA indicated that the most significant decline in satisfaction occurred for sets containing 2 (M=4.08) vs. 3 (M=2.86) bad pictures (p<.05). Further, satisfaction ratings for sets containing 0 vs. 1 vs. 2 and 3 vs. 4 vs. 5 vs. 6 bad pictures did not vary significantly from each other. Given these results, and because our intention was to allow the participants own interpretations of the outcome to arise, we selected the set containing one bad picture to represent a better, but not perfectly good, outcome and the set containing three bad pictures to represent a worse, but not perfectly bad, outcome.
Figure 1. Satisfaction with Outcome
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DEMONSTRATION OF RELATIVE ATTRIBUTE IMPORTANCE IN DIFFERENT USAGE CONTEXTS
We believed that different camera attributes may be deemed more (or less) important in vacation vs. graduation contexts. In order to confirm our beliefs, we measured the relative importance of camera attributes for these two usage contexts at the end of Study 3. We report them here in order to facilitate interpretation of the results that will be presented in the next section.
Design, Method, and Procedure
Five hundred twenty-four undergraduate business students participated in an online study in exchange for partial course credit. Participants responded to sixteen 7-point Likert scale items that captured their evaluation of the importance of eight different digital camera attributes under each of two usage contexts (vacation and graduation). Each scale item was anchored at the low end by (1) Not important at all and at the high end by (7) Extremely important. Eight measures pertained to the importance of each attribute for taking good vacation pictures and an additional eight asked about the importance of each attribute for taking good pictures at graduation.
We conducted paired t-tests to evaluate the relative importance of each attribute in each context. The results of the analysis are presented in Table 1. Significantly different means (p<.05) are indicated by asterisk. Seven of the eight attributes showed significant differences in importance between the two usage contexts. Among the attributes that were rated more important for vacation vs. graduation, the largest differences were observed for warranty (5.6 for vacation vs. 5.2 for graduation), weight (5.4 for vacation vs. 5.0 for graduation) and battery life (6.5 for vacation vs. 6.2 for graduation), and of these, battery life had the highest mean importance for vacation (6.5). Among the attributes that were rated more important for graduation vs. vacation, the largest differences were observed for flash range (5.7 for vacation vs. 6.1 for graduation) and automatic zoom (5.6 for vacation vs. 5.9 for graduation), and of these, flash range had the higher mean importance for graduation (6.1). The findings suggest that, if decision-makers are paying attention to contextual cues when they make their choice, a shift in usage context from vacation to graduation should trigger a commensurate shift in preference from battery life to flash range. These results supported using vacation vs. graduation to manipulate usage context and using battery life and flash range as focal camera attributes in these contexts.
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STUDY 1
The purpose of the Study 1 was to evaluate the effects of pre-choice uncertainty on the likelihood of repurchase.
Method, Design and Procedure
One hundred eighty-seven undergraduate business students participated in an online study in exchange for partial course credit. The study employed a 2 (level of uncertainty: high vs. low) X 2 (outcome valence: better vs. worse) X 2 (similarity of usage context: similar vs. different), 8-cell, between subjects design. Upon signing to the study, participants were randomly assigned to one of the eight conditions. The first stimulus asked participants to select from a set of three digital cameras for use on vacation. As before, an adaptation of an experimental paradigm employed by Dhar (1996a, 1997) was used to manipulate level of uncertainty. In Study 1 only the MMI and CI conditions were utilized to manipulate high and low uncertainty, respectively.
The three brands presented in the stimulus boasted different ratings on various attributes. Ratings were presented in a matrix format (See Appendix 3). In the low uncertainty (complete information) condition, ratings were provided for each attribute of each available camera brand. Brand A was rated 90 on battery life. Brand C was rated 90on ease of use. Brand B was rated 90on flash range, ease of use, and accessory kit. Also, the weight of Brand B was indicated as 5 ounces, vs. 6 ounces for Brands A and C. As such, in the low uncertainty condition, Brand B was equal or better than Brands A and C on four out of six listed attributes including flash range, but Brand A was best on battery life.
In the high uncertainty condition, different ratings were omitted from the matrix of attribute-level ratings to produce a misaligned missing information condition (see Appendix 3). For example, while Brand A was rated highest (90) of the three available brands on battery life, its ratings for flash range and the accessory kit were not provided. While Brand B was rated highest on ease of use, its ratings on battery life and the length of its warranty were not provided. While Brand C was rated highest on flash range, its rating on ease of use and the accessory kit were not provided. The only attribute on which information was available for all three brands was weight, however this information was non-diagnostic in that the weight of each of the cameras was listed as 6 ounces. Following from the results of Pretest 1, we expected this misaligned missing information condition to generate higher levels of uncertainty than the complete information condition used in the low uncertainty condition.
Following presentation of the stimuli, participants responded to a selection prompt (Which camera will you choose?) by selecting one of the three available cameras. Following selection, closed-end measures of degree of experienced uncertainty and type of experienced uncertainty.
Next, participants were shown a set of six pictures that were purportedly taken with the camera they selected. In the better outcome condition, only one of the pictures was bad (blurry, poor coloration, and poor lighting) and five were good (as described in the discussion of Pretest 2). In the worse outcome condition, three pictures were bad and three were good. No other information was provided regarding the outcome in order to allow participants own evaluations to manifest.
Participants indicated their satisfaction with the set of pictures by responding to a set of seven 7-point semantic differential scales ADDIN EN.CITE Crosby198729629617Crosby, Lawrence A.Stephens, NancyEffects of Relationship Marketing on Satisfaction, Retention, and Prices in the Life Insurance IndustryJournal of Marketing Research (JMR)Journal of Marketing Research (JMR)404-411244RELATIONSHIP marketingCONSUMER satisfactionQUALITY of serviceCOMPETITIONPRICESINSURANCE companiesCUSTOMER relationsCUSTOMER relationship managementLIFE insurance companiesMARKETING strategy1987American Marketing Associationhttp://ezproxy.lib.uh.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=bth&AN=5004911&site=ehost-live Eroglu199017917917Eroglu, Sevgin A.Machleit, Karen A.An empirical study of retail crowding: Antecedents and consequencesJournal of RetailingJournal of Retailing201-221662determinants & outcomes of retail crowding, 20 yr olds & olderConsumer BehaviorCrowdingRetailing1990NetherlandsElsevier Sciencehttp://ezproxy.lib.uh.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=psyh&AN=1991-06172-001&site=ehost-live Spreng199618018017Spreng, Richard A.MacKenzie, Scott B.Olshavsky, Richard W.A reexamination of the determinants of consumer satisfactionJournal of MarketingJournal of Marketing15-32603model of consumer satisfaction formation, assessment of perceived performance & desires & expectations congruency & attribute & information & overall satisfaction, 18-65 yr olds & olderAttitude FormationConsumer SatisfactionExpectationsModelsPreferences1996USAmerican Marketing Association10.2307/1251839http://ezproxy.lib.uh.edu/login?url=http://search.ebscohost.com/login.aspx?direct=true&db=psyh&AN=1996-05329-002&site=ehost-live (Crosby and Stephens 1987; Eroglu and Machleit 1990; Spreng et al. 1996). Each item was anchored at the low end by (1) and at the high end by (7). The specific measures used were: Dissatisfied (1) / Satisfied (7); Unfavorable (1) / Favorable (7); Unpleasant (1) / Pleasant (7); I dont like them at all (1) / I like them very much (7); Frustrated (1) / Content (7); Terrible (1) / Delighted (7).
Following a short filler task on an unrelated subject, the second choice stimulus was presented. Contextual similarity was manipulated by changing the usage context for the camera for one group of participants to graduation while leaving it as vacation for the remainder.
Results
Manipulation Check. In this study, the two reverse-coded confidence/certainty items (Zakay and Tsal 1993) served as a manipulation check of the level of experienced uncertainty. We averaged the items (correlation = 0.79) and performed an ANOVA on the resulting measure of average choice certainty / confidence. The analysis revealed that participants in the high uncertainty condition reported being significantly more uncertain (M = 2.6) than those in the low uncertainty condition (M = 1.4) F(2,186) = 23.78, p<.01).
With specific regard to outcome uncertainty, the analysis revealed a significant main effect of information availability on the likelihood of experiencing uncertainty related to insufficient information (F(1,186) = 9.93, p<.05). Participants in the high uncertainty condition (M=4.8) reported issues related to insufficient information to a greater extent than those in the low uncertainty condition (M=3.9).
ANOVA also revealed a significant main effect of information availability on the likelihood of experiencing uncertainty related to inability to predict outcomes (i.e. outcome uncertainty) (F(1,186) = 3.95, p<.05). Participants in the high uncertainty condition (M=3.7) reported issues related to inability to predict outcomes to a greater extent than did those in the low uncertainty condition (M=3.2). This finding confirmed proposition 1 which stated that missing information would give rise to outcome uncertainty. No other relationships were significant.
Direct Effect of Uncertainty on Repurchase. We conducted a logistic regression to evaluate the hypotheses. As shown in Table 2, the regression revealed a significant main effect of uncertainty level and of outcome which were qualified by a significant three-way interaction of uncertainty level, outcome, and contextual similarity. Because non-linear data transformations can influence significance testing of interactions, we also evaluated the interactions using OLS regression. All of the same main and interaction effects were significant in the OLS regression. No other effects were significant.
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The significant influence of uncertainty level was such that participants in the high uncertainty condition were less likely to repurchase (37%) than were those in the low uncertainty condition (71%) (see Fig. 2). These results provide support for hypothesis 1 which predicted a significant main effect of uncertainty on the likelihood of repurchase.
Figure 2. Repurchase Rates by Uncertainty Condition
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Learning Effects of Uncertainty. As previously discussed, the heightened state of learning brought about by higher levels of uncertainty is also expected to result in greater influence of information that is available in the post-choice period. In Study 1, two such forms of information were available to the participants, that related to choice outcomes and that related to the usage context. We now consider how these two forms of information interact with uncertainty to influence behavior.
Influence on Repurchase. As stated in hypothesis 2, we anticipated that the influence of outcome on the likelihood of repurchase would be stronger when uncertainty was higher rather than lower. Further, we expected to observe this outcome effect when sequential decisions were similar more so than when they were dissimilar (H2a)
Our findings provide support for hypothesis 2a but not for hypothesis 2. Recall that the logistic regression results shown in Table 2 indicated a significant main effect of outcome on the likelihood of repurchase. Worse outcomes led to a repurchase rate of 47% while better outcomes led 67% to repurchase. This main effect was qualified by a significant three-way interaction effect of uncertainty, outcome, and context.
Figures 3a and 3b show the repurchase patterns by condition of contextual similarity. The data show that, when the usage contexts were similar (i.e. when both the first and second choice scenarios were about purchasing a camera for use on vacation), higher levels of uncertainty prompted a more pronounced reaction to better outcomes than did low uncertainty (Figure 3a). When the outcome was better, 67% and 80% of participants in the high and low uncertainty conditions, respectively, reselected the same camera (p<.55). However, when the outcome was worse, only 9% of those in the high uncertainty condition repurchased, a decline of 58 points versus 64% of those in the low uncertainty condition (p<.01). These data show that, when sequential decisions were similar, a worse outcome exerted a greater effect on repurchase rates in the high uncertainty condition than it did in the low uncertainty condition. This effect was not observed when usage contexts were dissimilar. This provides support for hypothesis 2a.
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Figure 3b shows the influence of the uncertainty x outcome interaction on repurchase rates when the sequential decision contexts are dissimilar, that is, when the first choice referred to a camera for use on vacation and the second referred to a camera for use at graduation. When the first and second usage contexts are different, the influence of outcome on repurchase rate under high uncertainty was eliminated. This also provides support for hypothesis 2a.
Influence on Subsequent Choice. Study 1 was primarily designed to test the effects of uncertainty on repurchase. However, we also considered how uncertainty might influence which items were selected, and the specific nature of switching behavior.
Recall that we have shown that battery life is relatively more important to picture-taking during vacation than is flash range and that the opposite is true for picture-taking during graduation. Given this, we expected participants to exhibit a higher rate of switching from a brand that was better on battery life to one that was better on flash range when the usage context shifted from vacation to graduation. Further, we expected this pattern to be more pronounced under high uncertainty because high uncertainty would induce greater attention to the decision context. To this end we reviewed the relative share garnered by each brand in the first and second choices.
As described earlier, in the high uncertainty condition, attribute-level information for each of the three available brands was presented in a matrix format. Each brand boasted the highest rating on one attribute. Brand A boasted the highest rating on battery life, Brand B was rated highest on ease of use, and Brand C was rated highest on flash range. Additionally, different pieces of information for each brand were omitted creating a misaligned missing information format in which no brand was dominant. Since we expected people with higher uncertainty to be more sensitive to post-choice information, we anticipated that people in the high uncertainty condition would pay greater attention to choice-relevant information such as changes in the usage context. To this extent, we expected that a shift in usage context from vacation to graduation would produce a commensurate shift in item selection from Brand A to Brand C among people in the high uncertainty condition. However, such a shift in item selection was not expected when the usage context remained the same.
In the low uncertainty condition, a complete matrix of data was presented. Brand A was rated 90 on battery life, Brand B was rated 90 on flash range, ease of use, accessory kit, and weight, and Brand C was rated 90 only on ease of use. The number of favorable comparisons between Brand B and the competing options comprise a choice-facilitating cue in the low uncertainty condition that was not available in the high uncertainty condition. Given this, we expected to observe greater share for Brand B in the low uncertainty condition and a relatively high incidence of repurchase across conditions of contextual similarity. However, because the primary purpose of Study 1 was not to assess selection patterns, the design of the experimental manipulation for the low uncertainty condition yielded challenges to interpretation of selection patterns. In particular, Brand B is rated highest on four of the six presented attributes, including flash range. Thus, when Brand B is selected in the second choice opportunity, we are not able to distinguish whether it is being selected because it is better on a number of attributes or because it is rated highest on flash range. This limitation is addressed in Study 3.
As expected, frequency analysis revealed a significant difference in choice patterns exhibited during the first and second choice instances as a function of uncertainty level, contextual similarity and outcome in the high uncertainty condition but not in the low uncertainty condition.
Frequency analyses of second stage choices in the high uncertainty condition revealed a significant influence of usage contextual similarity on the likelihood that a specific bran d w o u l d b e s e l e c t e d ( 2 = 8 . 7 0 , d f = 2 , p <