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The dual role of price: Decomposing consumers' reactions to price
Abstract
Price plays two distinct roles in consumers’ evaluations of product alternatives: as a measure of sacrifice and as an informational
cue. This article merges two streams of empirical research into the effects of price on consumers’ product evaluations by
combining stated preferences, obtained from conjoint measurement, with data on self-reported measures in the form of beliefs
or attitudes. It thus offers new, substantive insights into the dual role of price. Specifically, it differentiates between
the informational and sacrifice effects of price using a choice-based conjoint approach and differentiates further among different
subcomponents of these two main effects by combining choice-based measures with self-reported measures that pertain to potential
sources of the dual role of price (price response drivers) and underlying consumer characteristics. Thus, this article presents
a general procedure to quantify the impact of the dual role of price on choice shares for product alternatives within a market
simulation. This procedure enables managers to simulate the choice share effects of changes in price response drivers, as
well as modifications in segmentation and targeting strategies that involve changes in the levels of the price response drivers
and thus the levels of the informational and sacrifice components of the price response of demand.
... Prior marketing research suggests that price premiums function as an extrinsic cue (Teas and Agarwal, 2000). Consistent with this, price can be seen from an informational and a sacrifice-related perspective (Völckner, 2008). According to cue utilization theory, the informational perspective refers to consumers' perception of a higher quality when prices are higher; higher prices signal prestige to other people; and expensive products trigger hedonistic effects such as more pleasure and excitement (Völckner, 2008). ...
... Consistent with this, price can be seen from an informational and a sacrifice-related perspective (Völckner, 2008). According to cue utilization theory, the informational perspective refers to consumers' perception of a higher quality when prices are higher; higher prices signal prestige to other people; and expensive products trigger hedonistic effects such as more pleasure and excitement (Völckner, 2008). These informational effects positively affect consumers' purchase behavior, unlike sacrifice effects, which include allocative and transaction utility components. ...
... These informational effects positively affect consumers' purchase behavior, unlike sacrifice effects, which include allocative and transaction utility components. The allocative role of price relates to the distribution of a limited budget, which needs to be split when purchasing alternative products, whereas transaction utility refers to the perception of a 'good deal' when paying less relative to the expected price (Völckner, 2008). Even though consumers have to make sacrifices when products have a higher regular price premium, a higher price premium enhances the informational effect of price in terms of perceived quality. ...
Even though eco-labels are a promising means to support consumers in making sustainable choices, insights into the effectiveness of eco-labels in combination with conventional marketing tools are scarce. This field study (a) investigates the effect of eco-labels on consumers' actual purchase behavior in an online fashion store, (b) examines the moderating role of price premiums, and (c) reveals a three-way interaction between eco-labels, price premiums, and discounts. Based on 58,000 actual purchase decisions from a large-scale field experiment, the results indicate a beneficial effect of eco-labels on consumer purchases and that higher price premiums can even reinforce the positive effect of eco-labels. The empirical findings also suggest that discounts only increase purchases for eco-labeled products in combination with high price premiums, but not with low price premiums. The present study has important implications for research on eco-labels and their interplay with other marketing cues and provides valuable guidance to marketers and policymakers on how to price eco-labeled products.
... This established the understanding of prices' dual role in purchasing decisions. While it is intended to inform customers about the sacrifice they must make, they also interpret the price as a quality signal (Rao and Monroe, 1989;Völckner, 2008;Lalwani and Shavitt, 2013) Research has repeatedly proven that the actual relationship between price and quality is low, however, the price-quality heuristic remains present in customers' minds (Gerstner, 1985;Kirchler et al., 2010;White and Yuan, 2012). There are various reasons for this. ...
... As introduced in Chapter 2.3.2, customers interpret prices not only as the monetary sacrifice to obtain a good, but also as an indicator of a good's potential benefit (Rao and Monroe, 1989;Erdem et al., 2008;Völckner, 2008). Like the research on reference prices, also literature on price-quality inferences identified several variables that influence how readily and strongly buyers use price as a quality cue (e.g., product category, availability of other cues, familiarity of buyers with product category; Völckner and Hofmann, 2007). ...
... It is, for example, unclear whether the findings can be generalized to other markets. In previous studies, the way how customers perceive and respond to prices was found to be stable across industries (Agarwal and Teas, 2002;Völckner, 2008). Nevertheless, this study investigates video games only. ...
... Price plays a dual role with opposing effects, a price-sacrifice effect and a priceinformation effect (Völckner, 2008). Based on classical economic theory, the pricesacrifice effect acts as an economic cost when deciding to purchase (Völckner, 2008) (Erickson & Johansson, 1985. ...
... Price plays a dual role with opposing effects, a price-sacrifice effect and a priceinformation effect (Völckner, 2008). Based on classical economic theory, the pricesacrifice effect acts as an economic cost when deciding to purchase (Völckner, 2008) (Erickson & Johansson, 1985. Customers evaluate the benefits of the product to the price that has to be paid to estimate the amount of money that needs to be sacrificed to obtain the product (Erickson & Johansson, 1985). ...
... People perceive a higher price as a mark of high-quality service and vice versa (Ainscough, 2006). This relationship is illustrated when customers decide to purchase the more expensive option over the cheaper alternative when looking at vastly similar products (Völckner, 2008). The dual role of price enables customers to evaluate the offer and come to a decision and marketers and managers need to understand as it is crucial when implementing various pricing strategies (Völckner, 2008). ...
... Specifically, we study (1) how absolute and relative prices of add-on products, compared with the prices of previously launched base and add-on products, influence their sales and (2) how relative prices perform differently under heterogeneous product popularity. We base our investigation on a conceptual framework in which price plays both an informative roleconsumers make absolute judgments about the add-on price itself (i.e., absolute price)-and an allocative role-consumers make comparative judgments about the add-on price with other price information (i.e., relative price) (Rao, 1984;Völckner, 2008). Regarding product popularity, we consider two popularity cues, namely, action-based and opinion-based, that affect consumers' purchase decisions (Chen, 2008;Chen, Wang, & Xie, 2011;Cheung, Xiao, & Liu, 2014). ...
... Yet, scholars have long argued that price plays not only an informative role-signaling product quality (Rao & Monroe, 1989) and performance (Dodds, Monroe, & Grewal, 1991)-but also an allocative role-allocating available monetary resources across multiple products (Erickson & Johansson, 1985). From the informative perspective, research suggests three potential sources in terms of consumers' response to price (Rao & Monroe, 1989;Völckner, 2008). First, consumers infer quality information from price, such that higher prices indicate higher quality and thus increase perceived utility (Kardes, Cronley, Kellaris, & Posavac, 2004). ...
... Favorable perceptions of higher prices are based on the price cue signals to the purchasers in terms of their own thoughts and feelings associated with using the product (Völckner, 2008). ...
Mobile app developers monetize in-app purchases or add-ons whose prices can be compared with the prices of the app and other add-ons. However, little attention is paid to pricing methods of the base and add-on products to maximize add-on sales. This study examines how absolute and relative prices of new add-ons—compared with those of the base and existing add-on products in the same product—influence their sales with a consideration of product popularity. Using a sample of 7,108 weekly observations derived from 74 mobile games and 514 add-ons, we find that the absolute (relative) price of a new add-on has a positive (negative) effect on the add-on sales. Moreover, we find that the negative relationship between relative price and sales is attenuated by base sales and review volume. This study provides app developers a substantial guideline for optimally pricing base and add-on products under different levels of product popularity.
... Previous price-related research also seemed to regard price as the monetary cost, consequently assuming that the more the givers spent on the gift, the more the receivers felt appreciated, and the closer the relationship was between the givers and the receivers (Flynn and Adams, 2009;Wang and Van der Lans, 2018). However, the literature on price perception indicates that price play dual roles indicating not only the monetary sacrifice but also perceived quality (Erickson and Johansson, 1985;Volckner, 2008). Furthermore, Bornemann and Homburg (2011) showed that psychological distance can alter the weight that consumers attach to the price roles. ...
... However, a growing body of consumer behavior research indicates that price also acts as a product quality indicator, which is known as the price-quality inference (Rao and Monroe, 1988). The indicators of perceived quality and perceived monetary sacrifice are regarded as the dual role of price (Volckner, 2008;Bornemann and Homburg, 2011). In contrast to the traditional economic research perspective, consumer behavioral research focuses on when and why prices act as quality indicators or monetary sacrifice indicators. ...
The present research explored differences in gift evaluation between gift givers and receivers. Three studies were conducted to test how the pricing influenced the gift evaluations of givers and receivers, and whether the price-quality and price-monetary sacrifice inferences were the underlying mechanisms. The results showed that: givers evaluated high-priced gifts as better than low-priced gifts, whereas receivers evaluated low-priced gifts as better than high-priced gifts; price-quality inference mediated the effect of pricing on gift evaluations, but only for givers. Furthermore, the effect of pricing on gift evaluation was moderated by the gift type: givers evaluated the high-priced gift as better only for the desirable gift (but not for the feasible gift); receivers evaluated the low-priced gift as better only for the feasible gift (but not for the desirable gift). The results demonstrate the effect of pricing on gift evaluation and could contribute to understanding the differences between givers’ and receivers’ perception of what a “good gift” is, and the underlying psychological mechanisms.
... Another extrinsic cue is price, which plays a dual role in consumer choices [78,79]. A high price may decrease the probability of purchasing, but conversely, indicates high quality and thus positively impacts the perceived utility and demand [78,79]. ...
... Another extrinsic cue is price, which plays a dual role in consumer choices [78,79]. A high price may decrease the probability of purchasing, but conversely, indicates high quality and thus positively impacts the perceived utility and demand [78,79]. The high price of environmentally friendly foods [80] affects their affordability for the public, particularly for low-income consumers [81]. ...
Upcycled foods contain unmarketable ingredients (e.g., damaged food produce, by-products and scraps from food preparation) that otherwise would not be directed for human consumption. Upcycled food is a new food category and thus faces several challenges, such as definition development, inclusion in the food waste management hierarchy and public acceptability. This review provides an overview of these three challenges. The upcycled food definitions have been developed for research, food manufacturers, and multi-stakeholders use. Thus, there is a need for a consumer-friendly definition for the general public. A simplified definition is proposed to introduce these foods as environmentally friendly foods containing safe ingredients that otherwise would not have gone to human consumption such as damaged food produce, by-products and scraps from food preparation. Moreover, an updated version of the food waste management hierarchy has been proposed by including the production of upcycled foods as a separate waste management action that is less preferable than redistribution but more favourable than producing animal feed. Furthermore, consumer sociodemographic characteristics and beliefs, as well as food quality cues and attributes, were identified as crucial factors for the public acceptability of these foods. Future research should address these challenges to facilitate the introduction of upcycled foods.
... One of these factors is consumers ' attitudes to products and services. Consumers' beliefs and attitudes are effective in determining the brand preferences of products and services, and also affect their purchasing decisions (Völckner, 2008). In addition to the past experiences of the personi his/her family and immediate circle, personality traits are also effective in attitude patterns. ...
... These factors guiding to consumers' attitudes and behaviors are a factor in the emergence of purchasing decisions. (Völckner, 2008). ...
The main purpose of the study is to examine the mediating effect of attitude towards local products in the effect
of consumer perceptions of price sensitivity on their intention to buy local products. In addition to this main
purpose examining differences in terms of price sensitivity according to demographic variables, attitude to
local products, and views on the intention to buy local products. As a result of the research, it’s been determined
that the mediating effect of the price sensitivity perceptions of consumers on their local product purchase
intention was positive and significant.
... Another important functional characteristic is perceived innovativeness, which refers to the perceived novelty and creativity associated with a company's offering (Kim, Hoon Kim, Garrett, & Jung, 2014;Kunz, Schmitt, & Meyer, 2011). Finally, price is an essential part of a company's offering that reflects the perceived costs or sacrifices associated with the purchase of a product or service (e.g., Völckner, 2008). ...
... Customer's perceived costs or sacrifices associated with the purchase of a company's offering (Völckner, 2008) 1. The prices of [Company] are high. ...
Beyond merely satisfying customers, companies are increasingly striving to build deeper and more meaningful customer relationships characterized by strong customer-company identification. However, whereas previous research has solely focused on symbolic drivers of identification, it remains unclear whether, when, and how managers can build on core functional company characteristics (i.e., quality, innovativeness, and price) to establish customer–company identification. The present study addresses these questions by developing a theoretical framework based on theoretical notions of social identity theory and the cue diagnosticity framework. Evidence from two field studies and one experimental study shows that functional company characteristics are not effective in creating customer–company identification per se, but that their influence depends on whether they match with a self-definitional need that is important to the customer (i.e., self-continuity, self-distinctiveness, or self-enhancement). The findings also reveal the underlying mechanism of this contingency by showing that a self-definitional need fosters customer–company identification because it strengthens the symbolic value of a matching functional characteristic. By identifying specific characteristic–need matches, this research offers novel insights into how managers can leverage functional company characteristics in their targeting and communication efforts to establish meaningful long-term relationships with customers.
... Some of the previous studies above indicate that Muslim customers have the consciousness to consider the quality of choosing products. Quality Consciousness (QC) consistently constructs the choices of products and services (Sproles, 1985;Sproles & Kendall, 1986), so QC customers' view product quality is a fundamental decision benchmark in most of their buying decisions (Völckner, 2008). QC is also integrated with the TRA Model in this study because QC has an essential role in determining customer behavior, including switching intention to use HCPC. ...
... Quality consciousness consistently shapes their products and service choices, but consumers have a different sensitivity to product and service quality in their purchase decisions (Sproles & Kendall, 1986). By definition, Quality consciousness (QC) is the degree of a consumer that focuses on purchasing high-quality goods or can be expressed as the degree of consciousness that product quality is paramount in buying decisions (Völckner, 2008). Therefore, the quality of a product has a more substantial impact on purchase decisions among high-quality conscious customers (Rao & Bergen,1992;Van Doorn & Verhoef, 2015). ...
Purpose: The purpose of this research is to study the role of life satisfaction, quality consciousness, and religiosity, which are integrated with the TRA Model to explain the switching intention of Muslim consumers to use Halal Cosmetics and Personal Care (HCPC). The second purpose is to investigate the relationship between variables used in this study to provide recommendations to HCPC producers about Muslim consumer behavior in the market. Research design, data, and methodology: The target population in this study is Muslims who live in Greater Jakarta. Data collection is carried out by the self-administered survey method based on the Purposive sampling technique, and the questionnaire is distributed online. The statistical analysis to test the research hypotheses is the Partial Least Squares-Structural Equation Model (PLS-SEM). Results: Life satisfaction, product quality consciousness, and religious commitment have a significant effect on attitude to switching but do not significantly influence the intention of switching to use HCPC. Conclusions: Life satisfaction, quality consciousness, and religiosity that represent individual factors indirectly affect the intention to switch to use HCPC. Thus, religious commitment influences attitude to switching both directly and indirectly.
... People's memories influence their decisions. As economics and marketing theory suggest, price memory and price knowledge are especially important variables for explaining shopping decisions (e.g., Estelami, Lehmann, & Holden, 2001;Olavarrieta, Hidalgo, Manzur, & Farías, 2012;Völckner, 2008). Against this background, it is not surprising that consumers' knowledge about individual prices has justifiably received extensive attention from marketing and consumer researchers (e.g., Dickson & Sawyer, 1990;Vanhuele & Drèze, 2002;Wakefield & Inman, 1993). ...
... Price plays two distinct roles in shoppers' evaluations of product alternatives (Völckner, 2008;Bornemann & Homburg, 2011). Price might be used as a measure of sacrifice (i.e., an amount of money a person must pay), but it also takes on the role of informational cue (i.e., quality and status inference). ...
This research examines the neurophysiological correlates of consumers’ price memory processes. We focus on the explicit and implicit dimensions of consumers’ price knowledge and use an experimental functional Magnetic Resonance Imaging (fMRI) study to assess how the encoding of task-dependent price memory affects the choice process and neural activation. The findings of our study add to the field of consumer neuroscience by demonstrating how neural correlates of explicit and implicit task-dependent price memory can shed light on processes that guide consumer decision-making. Over the course of our experiment we found that consumers did not always make consistent decisions, but that their decisions were influenced by explicit components of price memory. Implicit price memory components seem to have a more supportive role in the decision-making process. In summary, we found that price memory is a dynamic construct that is influenced by unconscious and neurophysiological processes, and we conclude that a neurophysiological perspective can add value for consumer and marketing research.
... In the third part of the questionnaire, participants answered a set of questions about themselves and their relationship with the product and its manufacturer. This part consisted of items drawn directly or slightly modified from established scales for the following constructs: quality consciousness (Völckner, 2008), satisfaction (Maxham and Netemeyer, 2002), perceived quality (Netemeyer et al., 2004), the Amazon star rating, WTPP (Jones et al., 2008), expertise (Thompson et al., 2005) and RI (Dutta et al., 2007). The last part of the questionnaire collected demographic information (Table III). ...
... Not all consumers are equally sensitive to the quality of products and services in their purchase decisions, nor do they show the same degree of involvement in such decisions (Sproles and Kendall, 1986). For a quality-conscious customer, product quality is a very important decision criterion in most of their purchase decisions (Völckner, 2008). Thus, for high-quality conscious customers, the experienced quality of a product as measured by CEPQ should have a stronger impact on purchase decisions, including the willingness to pay more for quality products (Rao and Bergen, 1992;Van Doorn and Verhoef, 2015). ...
Purpose
Product quality is a central construct in several management domains. Theoretical conceptualizations of product quality unanimously stress its multidimensional nature. Yet, no generalizable, multidimensional product quality scale exists. This study develops and validates a multidimensional Customers’ experienced product quality (CEPQ) scale, across four diverse product categories.
Design/methodology/approach
Based on the exploratory studies, CEPQ is conceptualized as a second-order reflective-formative construct and validated in quantitative studies with survey data collected in the USA.
Findings
Results reveal that the CEPQ scale and its underlying quality dimensions possess sound psychometric properties. In addition, CEPQ has a substantial impact on customer behavior over and above customer satisfaction. The strength of this impact is positively moderated by expertise and quality consciousness. CEPQ predicts objective quality scores from consumer reports substantially better than the existing measures of product quality.
Research limitations/implications
The cross-sectional nature of the main study, as well as samples from only one country, restricts the generalizability of the findings.
Practical implications
Operations managers and marketers should start to measure CEPQ as an additional key metric. The formative weights of the first-order quality dimensions explain how customers define product quality in a specific product category.
Originality/value
A generalizable, multidimensional scale of product quality, CEPQ, is developed and validated. Materials as a new product quality dimension is identified. Once correctly measured, product quality ceases to be a mere input to satisfaction. Boundary conditions for CEPQ’s relevance were hypothesized and confirmed.
... Beyond money, research identifies consumer sacrifice as the expending of energy, effort, or time (Baker, Grewal, and Voss 2002;Bender 1964;Bradford and Sherry 2013;Gupta and Kim 2010;McGrath, Sherry, and Levy 1993). The degree of sacrifice, conveyed by price, may serve as information to consumers (Dodds, Monroe, and Grewal 1991;Gao, Zhang, and Mittal 2017), inform perceptions of alternative offerings, or provide indicators of offering quality (Suri, Kohli, and Monroe 2007;Völckner 2008). In addition to the sacrifice one may make to obtain an offering, there is the sacrifice that manifests as a consequence of forgoing other options (Larsen and Watson 2001;Völckner 2008). ...
... The degree of sacrifice, conveyed by price, may serve as information to consumers (Dodds, Monroe, and Grewal 1991;Gao, Zhang, and Mittal 2017), inform perceptions of alternative offerings, or provide indicators of offering quality (Suri, Kohli, and Monroe 2007;Völckner 2008). In addition to the sacrifice one may make to obtain an offering, there is the sacrifice that manifests as a consequence of forgoing other options (Larsen and Watson 2001;Völckner 2008). While individuals may feel minimally burdened by the particular form of sacrifice made, some sacrifices may be deemed too great, thereby reducing a consumer's willingness to purchase an offering (Belk and Coon 1993;Dodds, Monroe, and Grewal 1991). ...
Nonprofit organizations often rely on individuals to execute their mission of addressing unmet societal needs. Indeed, one of the most significant challenges facing such organizations is that of enlisting individuals to provide support through the volunteering of time or donation of money. To address this challenge, prior studies have examined how promotional messages can be leveraged to motivate individuals to support the missions of nonprofit organizations. Yet promotional messages are only one aspect of the marketing mix that may be employed. The present study examines how donor-based nonprofit organizations can employ the marketing mix—product, price, promotion, place, process, and people—to influence the experiences of sacrifice associated with donation. The authors do so through an ethnographic study of individuals participating in living organ donation. First, they identify the manifestation of sacrifice in donation. Next, they define three complementary and interactive types of sacrifice: psychic, pecuniary, and physical. Then, they articulate how the marketing mix can be employed to mitigate experiences of sacrifice that emerge through the donation process. The authors conclude by discussing implications for marketing practice and identifying additional research opportunities for sacrifice in the realm of donation.
... Companies use these signals to reduce information asymmetry with consumers, aiming to enhance the efficiency of the exchange process (Akerlof, 1970). Marketing-mix research (e.g., Boulding & Kirmani, 1993;Cambier & Poncin, 2020;Volckner, 2008) further supports this idea, highlighting that signals from sellers, such as pricing, advertising, brand transparency, and warranties, not only reduce perceived risk but also positively influence buyers' perceptions of brand integrity and behavioral intentions by mitigating information asymmetry. BE has been recognized as an important, accessible, and relevant signal in customer decision-making (Aaker, 1991;Keller, 1993). ...
As a result of digitalization, consumers have more agency than in earlier times. Consumers now have the ability to express their consumption experiences through diverse online platforms by means of rating or providing written feedback. The ability to effectively decipher online customer reviews (OCRs) holds significant importance for businesses due to its far-reaching consequences. This research aimed to determine if review valence (RV) (the degree to which reviews are extremely positive or negative) was transmitted to purchase intentions via review helpfulness within the framework of signaling theory and cue-diagnosticity theory. The research also examined the presence of negative bias among customers when evaluating the valence of online customer reviews (OCRs) and its signaling ofreview helpfulness. Further, to determine if such an effect occurs within the boundaries of brand equity, an experimental study was conducted sequentially on two products: mobile phones and laptop computers. The study did not find negative bias among consumers concerning the assessment of RV. Further, the study supports an indirect effect of RV on purchase intention through review helpfulness. In addition, the results demonstrate that the referred effect is fully mediated by review helpfulness. Moreover, the results indicate that such an indirect effect is contingent on the brand's equity. The findings indicate that the RV has a significant effect on purchase intentions, particularly when brand equity is low. The study also discusses its managerial and research implications.
... Although the impact of prices and reviews on consumer behavior has been widely studied (e.g., Sahoo, Dellarocas, and Srinivasan 2018;Völckner 2008), consumer responses vary with contexts (Kawaguchi, Uetake, and Watanabe 2019). Our study adds to the existing literature on recommender design by examining how consumer searches and purchases respond to the provision of information cues in the context of recommenders. ...
... Jones et al.'s (2008) measurement focuses on the degree a consumer is willing to help a service provider by patronizing and encouraging others to do so, and the likelihood they would be willing to pay more to continue having a relationship with the brand, provides a tested and validated measurement of brand loyalty and its outcomes. Additionally, Ailawadi et al.'s (2001) and Völckner's (2008) measurements (which share all but one item) focus on assessing the degree of preference consumers have for a brand, provides complementary scale items that allow for a more thorough understanding of the level of brand loyalty developed by the consumer-brand relationship. Finally, the scale items developed by to assess the effect of cocreation on customer loyalty can be combined with the other proposed measurements to get a full picture of the relationship. ...
Purpose
This paper aims to critically review the most cited literature published from 2000 to 2020 in 24 top-ranked marketing journals on the three most studied branding concepts of the 21st century – brand equity, brand loyalty and brand image – to explore how in these papers they have been defined, measured and examined, and propose how they should move forward in an era where brands are expected to be “socially and socio-politically conscious.”
Design/methodology/approach
For each concept a systematic literature review is conducted. In doing so, the definitions, antecedents, outcomes and measures for each concept were accessed and synthesized.
Findings
The systematic literature reviews provide a “state-of-the-art” snapshot of each concept and collectively demonstrate there is no consensus on the independence and interdependence of these dynamic multidimensional concepts. Based on the recommended process in the measurement literature, an evolved definition of each concept is proposed. In addition to the corresponding research directions presented in the moving forward sections of each systematic literature review, common research avenues emerged.
Originality/value
This paper acknowledges these three branding concepts as dynamic (i.e. evolving over time), systemically reviews and synthesizes the extant literature, and provides a path forward to defining, measuring and exploring brand equity, brand loyalty and brand image in the present era where brands are expected to be socially and socio-politically conscious with responsibilities to the planet, people and profit.
... First, we controlled randomisation on age classes, gender and education, which does not harm the overlap assumption (i.e. each individual has a positive probability of receiving each treatment level) and the independent and identically distributed sampling assumption (i.e. the potential outcomes and the treatment status of each individual are unrelated to the potential outcomes and treatment statuses of all other individuals in the population). Then, we controlled for group differences concerning quality consciousness (3 items, adapted from Völckner, 2008), environmental concern (4 items, adapted from Chang, 2011), ambivalence towards green products (5 items, adapted from Chang, 2011), product category purchase planning (5 items, adapted from Gauri et al., 2008) and product category usage frequency (Hamilton et al., 2011). We used the propensity score matching technique as a pre-processing step (Austin, 2011) to construct a balanced sample before comparing the dependent variable (i.e. the interest in the PoP contents) between those who have processed the minimal PoP treatment and those who have processed the technological PoP treatment for AAA batteries or running shoes. ...
This paper presents two empirical studies that investigate various combinations of different products and types of Point-of-Purchase displays (PoPs) from self-regulation and operant conditioning theoretical perspectives. The results reveal that PoPs’ effectiveness depends on the congruence between, on the one hand, the type and the content of the PoP and, on the other hand, the perceived product attributes. After discussing how to engage consumers with product-related signals that help perceive an adequate control over the in-store purchasing experience, the paper contributes to the literature by offering theoretical and managerial implications on designing effective green products display strategies.
... Eq. (4) assumes that preferences for the price are linear. This linearity assumption has often been made when dealing with price ( Keller et al., 2021 ;Papies et al., 2011 ;Meyer et al., 2018 ;Völckner, 2008 ). This assumption also makes our model more parsimonious: An alternative would have been to use a parthworth model that requires two additional parameters for the estimation. ...
Background
Mothers in Germany are entitled to midwifery care; however, they face a lack of skilled professionals. While the reliability of the access to midwifery is of great public interest, we know little about clients’ preferences.
Objectives
We conduct a discrete choice experiment to study preferences and willingness to accept copayment for the entire scope of midwifery care (pregnancy, delivery, and postnatal). Thereby, we aim to provide policy recommendations for priority settings in times of scarcity. Furthermore, we evaluate to what extent midwives’ education matters to parents and assess the degree of support for the latest Midwifery Reform Act that transfers education from vocational schools to universities.
Design
Discrete choice experiment with separated adaptive dual response.
Settings
Online Survey promoted through Facebook to parents in Germany.
Respondents
2,080 respondents completed the experiment. They all have or are expecting at least one natural child, mainly born between 2018 and 2020 (87%). The average respondent is female (99%), 33 years old, with a university degree (50%).
Methods
We use a D-optimal fractional factorial design and obtain individual parameter estimates through a Multinomial Logit analysis with Hierarchical Bayes estimation techniques. We calculate willingness to pay and importance weights and simulate uptake probabilities for different packages of care. To avoid extreme choice behavior, we apply separated adaptive dual response.
Results
Home visits during the postnatal phase are most important (importance weight 50%); online support is demanded when no personal support is available. We find that 1:1 care during delivery is highly preferred, but one midwife supporting two women intrapartum is still acceptable. The midwife´s education plays a minor role with an importance weight of 3%; however, we find a preference for midwives trained at vocational schools rather than at universities.
Conclusions
In times of scarcity, postnatal care in the form of home visits should be prioritized over pregnancy counseling, and online services should be promoted as an add-on but not as a substitute for personal support. There is a high level of willingness to accept co-financing to ensure the availability of services usually covered by health insurance.
Tweetable abstract
How much are #mothers willing to pay to ensure the availability of a #midwife? Doi:
... Moreover, many researchers have held the viewpoint that greater levels of price beget better levels of product quality (Rao & Monroe, 1989;Dodds et al., 1991;Kardes et al., 2004). This is indicated from the fact that many low price products do not get in to the choice zone of consumers in spite of the similarities with other goods (Völckner, 2008). Authors have proposed strong positive associations amongst quality and perceived price (Monroe & Krishnan, 1985; ...
This study examines and analyzes the luxury scenario in India, luxury fashion in particular, comprehending the luxury consumption pattern of Indian consumers; getting insights into their attitudes regarding luxury fashion brands as well their purchase intentions, satisfaction from purchase of luxury fashion brands along with their repurchase intentions for the same.
... This heterogeneity is attributable to the discrepant interpretation of price promotions across consumers (Aydinli et al., 2014;Bertini & Aydinli, 2020), which is influenced by an array of underlying consumer values. For example, some consumers are concerned about their social status and use the prices of goods they buy to signal prominence, while others aim for getting good deals, which gives them a sense of being competent shoppers (Völckner, 2008). ...
Sustainability problems often seem intractable. One reason for this is due to difficulties coordinating actors’ efforts to address socially responsible outcomes. Drawing on theories of bounded ethicality and incorporating work on communicating shared values in coordinating action this paper outlines the lack coordination as a matching issue, one complicated by underlying heterogeneity in actors’ moral values and thus motivation to address socially responsible outcomes. Three factors contribute to this matching problem. First, we argue it is not actors’ simple cognitive awareness, but their moral awareness of social issues that explains why certain actors move to address problems while others do not. In other words, actors may recognize sustainability problems, but are not motivated to solve them as they are not understood as moral problems. Second, we posit that progress requires alignment in issues that some actors find worth addressing whereas others do not, thus explaining how heterogeneity in moral perceptions interrupt coordination towards socially important goals. Finally, we propose that progress is undermined if actors myopically focus on level-specific outcomes in ways that elucidates why institutional responses often fail to address individual outcomes and vice versa. We use the existing literature on the socially important issue of food waste to examine our theoretical contribution and develop a typology that explains conditions that inhibit (or promote) coordination. Thus, our work proposes a psycho-structural view on matching and coordination toward sustainable outcomes, highlighting how psychological and structural constraints prevent effective coordination in addressing sustainability goals.
... For each meal, we asked respondents to report a date, the number of guests, dietary restrictions, the main protein source, the bar-codes of the ingredients 5 and the person who paid for the meal. The second survey further included several background variables (pet ownership; rural versus urban environment; belief in anthropogenic climate change; selfreported environmental footprint; self-reported sustainable food consumption; self-reported hedonism) and several scales to measure environmental skepticism (nine items; Goh & Balaji, 2016), animal welfare concerns (seven items; Cembalo et al., 2016), product quality consciousness (three items; Völckner, 2008) and environmental knowledge (seven items; Paço & Lavrador, 2017). ...
A shift to more sustainable diets is needed to ensure food security and to reduce the pressure on the environment. Yet, many consumers have misconceptions about the environmental impacts of their diets and lack knowledge on how to prepare sustainable meals. This study uses a mixed-methods approach to develop four information nudges and to test their impact on dietary choices among a representative sample of Dutch consumers. A 2 × 2 between-subjects design crossing type of information (procedural versus declarative) with type of impacts (health versus environmental) is applied. The environmental impact is measured in terms of CO2 emissions, land use and water use. We find that pre-intervention knowledge about sustainable or healthy diets is related to the sustainability of participants’ dietary choices. Procedural knowledge on how to prepare a healthier meal has the greatest potential to influence dietary behavior, in particular for participants without prior self-reported dietary restrictions.
... The second survey further included several background variables (pet ownership; rural versus urban environment; belief in anthropogenic climate change; self-reported environmental footprint; self-reported sustainable food consumption; self-reported hedonism) and several scales to measure environmental skepticism (nine items; Goh and Balaji, 2016), animal welfare concerns (seven items; Cembalo et al., 2016), product quality consciousness (three items; Völckner, 2008) and environmental knowledge (seven items; Paço and Lavrador, 2017). ...
A shift to more sustainable diets is needed to ensure food security and to reduce the pressure on the environment. Yet, many consumers have misconceptions about the environmental impacts of their diets and lack knowledge on how to prepare sustainable meals. This study uses a mixed-methods approach to develop four information nudges and to test their impact on dietary choices among a representative sample of Dutch consumers. A 2x2 between-subjects design crossing type of information (procedural versus declarative) with type of impacts (health versus environmental) is applied. The environmental impact is measured in terms of CO2 emissions, land use and water use. We find that pre-intervention knowledge about sustainable or healthy diets is related to the sustainability of participants' dietary choices. Procedural knowledge on how to prepare a healthier meal has the greatest potential to influence dietary behavior, in particular for participants without prior self-reported dietary restrictions.
... Lastly, and building on the above, Dodds, Monroe and Grewal's market cue-product evaluation model [26] assumes a dual role of price information, which has a positive relationship with perceived quality but an inverse relationship with perceived (monetary) sacrifice [27]. Perceived quality refers to '...a consumer's judgment about the superiority or excellence of a product' [28], whereas perceived sacrifices can be defined as '...an indicator of the amount of sacrifice needed to purchase a product' [26]. ...
Background
European countries face fiscal pressure regarding the long-term sustainability of their healthcare system due to increasing levels of public health expenditures and mounting demographic pressures. The promotion of generic drugs is considered to be an efficient means to tackle these challenges; however, market diffusion remains slow. The aim of this study was to investigate the impact of price and brand cues on purchase intentions by means of Direct-to-Consumer (DTC) advertising, and to build on the market cue evaluation model by Dodd et al.
Methods
Participants rated purchase intentions on six DTC adverts varying in price and brand information, followed by self-reports on purchase intentions, attitudes towards generics, brand loyalty, price consciousness, as well as perceptions of quality, risk and value. Open-ended questions explored attitudes toward generic drugs.
Results
Brand information and purchase intentions were mediated by perceived risk and perceived quality, while price information influenced purchase intention through perceptions of quality, risk and value. Consumers’ purchase behaviour was furthermore influenced by unawareness and misconceptions, past experiences, and advertising as a decision-making tool.
Conclusions
Advertisements, including price and brand information, are an important tool to improve consumers’ awareness of the availability of different OTC drugs. Practical and theoretical implications are discussed.
... Each consumer has different price ratings [McGowan, Sternquist, 1998]. Consumers think that they can show their prestige and status to other people by purchasing expensive products [Völckner, 2008]. In their view, luxury brands meet all these expectations [Derinözlü, 2020]. ...
In the age of consumption, customers prefer high-quality and exclusively designed luxury brands. This trend is based on a variety of reasons, such as the manifestation of status and wealth, as well as positive emotions and symbolic power created by these brands. The study aims to examine the variables of trust and loyalty to luxury brands, brand preference and price sensitivity, and to determine whether there is a meaningful relationship between these variables. If there is, to investigate the mediating role of price sensitivity in the effect of consumer trust and loyalty to luxury brands on brand preference. The methodological framework of the research includes planned behaviour theory to predict customers’ intentions and behaviours towards luxury brands. The information base of the research includes data from the online survey of 563 respondents from Turkey. Among the main research methods applied in the study are descriptive statistics and correlation analysis. SPSS 22.0 and AMOS software, as well as the principles of structural equation modeling are used to analyze the data. In the research, we could not determine the mediating role of price sensitivity in the effect of brand trust and loyalty on brand preference. A statistically significant, positive, and healthy relationship exists between brand trust and brand loyalty and brand preference. The study shows that the effect of price sensitivity and brand trust on brand preference is weak. The theoretical and practical importance of the study is to support companies in developing successful luxury branding strategies and to contribute to the luxury brand literature.
... Krishna (Krishna et al, 1991) showed that the promotional status of a product influenced consumer's knowledge of prices and ; Monroe and Lee (1999) examined the research design choices used in collecting price knowledge data. Völckner (2008) claimed that price has two different roles in customers' evaluations of product alternatives: a measure of sacrifice (i.e. the amount of money the shopper must sacrifice) and an informational cue (i.e. quality and status inference). ...
The aim of this research was to compare consumer expectations of quality of tomatoes based on disclosed price and later estimate the unknown price of tomatoes based on its tasting. One hundred six participants tasted four types of tomatoes with disclosed prices and with unknow prices and fulfilled the questionnaire. We focused on analysing how recognition of prices affects customer behaviour and price estimation of additional products. Using descriptive statistics and machine learning techniques in WEKA software we got results. The findings of this study corroborate that the knowledge of current prices significantly affected participants’ perception of the quality of the tomatoes being tasted; affected 63,21% students’ maximum price limits that they are willing to pay for tomatoes and make 32,77% of students use known prices and its rounded values to evaluate prices of additional products.
... In this respect, we examine the consumers' attention to the final price, because it should relate to both the perceived complexity of a price plan and the perceived sacrifice evoked by a payment (Prelec & Loewenstein, 1998;Völckner, 2008). According to the eye-mind assumption there should be a positive correlation between visual attention and processing in working memory: when individuals' attention is drawn to salient attributes such as the final price they are likely to be overweighed during decision making (Bordalo et al., 2013;Pieters & Warlop, 1999). ...
Drip pricing (DP) is distinct from partitioned pricing as it sequentially discloses surcharges to consumers. Critics see DP as a deceptive pricing tactic because it obscures the final price of an offer. We examine the effects of the timing of the final price disclosure and the number of sequentially presented surcharges on consumers' attention to the final price and, ultimately, perceived price fairness. In an eye‐tracking study with 225 participants, we find that the sequential (vs. up‐front) disclosure of the final price lowers perceived price fairness by increasing consumers' attention to the final price, in particular, when the number of surcharges is high. In addition, the sequential disclosure of the final price lowers perceived price fairness because of higher perceived price complexity and lower pricing transparency perceptions. The findings suggest that firms need to be aware of both attentional and cognitive effects of the final price disclosure when designing DP.
... A more elegant solution may be possible if the researcher can reasonably assume a linear relationship of the preferences for the continuous levels. Scholars have often made this linearity assumption when dealing with the price attribute (e.g., Papies et al. 2011;Meyer et al. 2018;Völckner 2008). ...
Discrete choice experiments have emerged as the state-of-the-art method for measuring preferences, but they are mostly used in cross-sectional studies. In seeking to make them applicable for longitudinal studies, our study addresses two common challenges: working with different respondents and handling altering attributes. We propose a sample-based longitudinal discrete choice experiment in combination with a covariate-extended hierarchical Bayes logit estimator that allows one to test the statistical significance of changes. We showcase their use in studies about preferences for electric vehicles over six years and empirically observe that preferences develop in an unpredictable, non-monotonous way. We also find that inspecting only the absolute differences in preferences between samples may result in misleading inferences. Moreover, surveying a new sample produced similar results as asking the same sample of respondents over time. Finally, we experimentally test how adding or removing an attribute affects preferences for the other attributes.
... Motivação Utilitária (Völckner, 2008): baseada nos atributos funcionais (racionais) dos produtos/serviços. MU1: Aproveitar o preço reduzido. ...
O artigo investiga o papel de motivações utilitárias e hedônicas na cocriação de valor e sua relação com a experiência de consumo em serviços de hospedagem oferecido por plataforma de consumo colaborativo: o AirBnb. Baseado na literatura sobre economia compartilhada e consumo colaborativo, hipóteses foram formuladas e um modelo conceitual proposto. Um survey com 967 respondentes foi conduzido e os dados foram analisados por meio da técnica de modelagem de equações estruturais. Verificou-se que as motivações de cunho utilitário não apresentam relação com cocriação de valor e experiência de consumo, diferentemente das motivações hedônicas que apresentaram associação positiva com ambas variáveis. Ademais, os achados evidenciaram que cocriação de valor, além de anteceder a experiência de consumo, assume papel mediador da relação entre motivações hedônicas e experiência de consumo. Esta pesquisa traz contribuições importantes para a área, uma vez traz evidência empírica do papel que motivações hedônicas exerce em práticas de consumo colaborativo, mais especificamente em serviços de hospedagem compartilhada. Além disso, consubstancia estudos anteriores que reconhecem a cocriação de valor enquanto aspecto importante na oferta de experiência positivas em serviços de hospitalidade e turismo.
... For instance, Mazumdar et al. [6] considered that the market pricing in reality is weakly efficient, and assumed investors should make assessments on the basis of anchor price or reference price. In Völckner et al. [7,8], investors not only considered the investment value but also paid attention to the role of history price as an informational cue, thereby inducing the changes of price perception. In the view of Vanhuele et al. [9][10][11], the sensitivity of investment intention to subjective price images could not be well explained under the efficient market environment. ...
In classical finance theory, cognitive bias does not play any role in predicting returns. With the development of the economy, the classical theory gradually finds it difficult to offset the irrational demand through arbitrage. Due to the rise of behavioral economics, how to allocate stock portfolios in the highly subjective environment is an unavoidable problem. Considering the decision heterogeneity between the rational market and the irrational one, the mean-variance (MV) method was improved in the construction of a market bias index for stock portfolio allocation, which we called EMACB (exponential moving average of cognitive bias)-variance method. Besides, due to the lack of related research, we introduced a measure of aggregate investor cognitive bias by adopting the state-space model. Finally, the proposed method was applied in an investment allocation example to prove its feasibility, and its advantages were emphasized by a comparison with another relevant approach.
The development of energy-efficient buildings has been deemed a critical component in accomplishing reduction targets and making cities more sustainable. Hence, governments of highly developed countries with large urban populations have set policy targets and introduce incentive schemes to expand the supply of the green buildings, which are environmentally friendly and energy-efficient over their entire lifecycle. However, the low return on investment, lack of awareness, and insufficient information and incentives have hindered the adoption of zero-energy buildings (ZEBs) in the Korean housing sector. This study aimed to examine the public's heterogeneous preference structure towards residential ZEBs to identify marketing and policy implications for promoting demand. The findings showed that cost-related factors were the most significant elements affecting public acceptance of ZEBs in Korea. Additionally, the study simulated the acceptance of ZEBs as a function of subsidy levels and found that consumers are willing to pay a premium for more energy-efficient homes with greater environmental contributions and that provide long-term benefits in overall housing expenses. In all, it is recommended for the government to identify suitable regions for the implementation of ZEBs based on regional characteristics and to implement a subsidy program to achieve the goal of expanding environmentally sustainable homes.
Utilizing a customer style inventory, in this research we find that customer personality is associated with customer behavior in a food service context. We collected responses from 125 independent and 99 franchise coffee houses recruited using an online survey platform. Based on partial least-structured structural equation models, our findings demonstrate that brand and recreation consciousness influence both brand attractiveness and similarity. Impacts of quality consciousness on attractiveness and novelty consciousness on similarity are also found. Brand attractiveness leads to customer positive purchase intention toward the coffee houses. However, customer price consciousness and impulsiveness do not significantly influence positive behavior. Finally, we compare the impact of customer consumption styles on customer behavior between independent and franchise coffee houses. We observe higher impacts of quality consciousness among independent coffee house customers, whereas recreation consciousness is more influential among customers of franchise coffee houses.
Purpose
Due to increasing competition, creating and enhancing franchisee patronage behaviors are critical elements in the food franchise industry. Franchise brand-related characteristics are known to influence franchisees’ evaluations. Thus, this paper examines the antecedents of franchisees’ perceived value, which leads to positive behaviors in the food franchise sector.
Design/methodology/approach
A research model is proposed to describe relationships among different types of functional company characteristics (i.e. quality, innovation, and price) on perceived value and behavioral intentions, and impact of operational involvement in the context of franchisees. A quantitative approach was leveraged to collect 266 usable online questionnaires, together with SmartPLS to analyze the measurement model and proposed hypotheses.
Findings
Results show that perceived quality on the part of franchisees is the most significant determinant of perceived value, followed by perceived innovation and price. Also, the impact of perceived value on franchisees’ intentions – including continuous and word-of-mouth intentions – is supported. Last, the role of operational involvement (i.e. duration and number of food franchise operations) in perceived value is examined.
Originality/value
To add to the limited research in the behaviors of franchisees, this study provides useful insights to achieve sustainable growth in the franchise brand context.
Purpose
This study examines the effect of five price perception dimensions (price consciousness, price mavenism, sale proneness, price-quality schema, and prestige sensitivity) on consumer's perceived value (acquisition value, and transaction value), and how perceived value affects consumers' behavioral intentions (purchase intentions, and intentions to recommend). It also examines the moderation role of face consciousness.
Design/methodology/approach
A quantitative research methodology using online survey technique is employed to collect cross-cultural data from respondents from China ( n = 371) and Egypt ( n = 384). Structural equation model (SEM) via SmartPLS v.3.2.9 is conducted to analyze data.
Findings
The results show that consumers’ behavioral intentions toward suboptimal fresh produce are positively affected by both dimensions of perceived value. As well as, perceived value is influenced by different price perception dimensions. Moreover, face consciousness partially moderates the relationship between perceived value and behavioral intentions.
Originality/value
To best of the authors’ knowledge, it is the first study to associate price perception dimensions with purchase value dimensions in the context of suboptimal products. It also contributes to utility and purchase value theory by employing the distinct measures of both perceived acquisition value and transaction value, to enable us to obtain a better understanding of the whole picture of perceived value. In addition, it contributes to regulatory focus theory through the inclusion of face consciousness in the purchase value model. Moreover, up to the researchers' knowledge, prior investigation on these issues in Egypt and China as a cross-cultural research does not exist.
Despite considerable difference between brand and attribute information, the question of whether sequential presentation of brand and attribute information can impact product evaluation has yet to be addressed. We answer this question by identifying a novel affect‐based mechanism for sequential presentation of brand and attribute information that is distinct from existing mechanisms that are predominantly cognitive. Based on the affective mental associations for a brand (vs. an attribute), we show that willingness to pay for a product is higher under brand‐first (vs. attribute‐first) presentation, a difference that we term the “affect premium” for brands. We present an affect‐based explanation for this phenomenon by showing that it is observed only for strong brands, mediated by affect elicited by the brand, and observed only under promotion (vs. prevention) focus due to contingent reliance on affect. Further research could determine the information processing pathway involved and boundary conditions for the observed effect.
The price is a key purchase criterion for commodity goods and services. This chapter aims to deepen the understanding of consumers’ consideration and evaluation of budget brands by examining the roles of the price cue. A shopper intercept study with customers of retailers in Switzerland provides the data, which was analyzed using fuzzy-set qualitative comparative analysis (fsQCA). The findings of this study offer new insights into the complex patterns of price perceptions for evaluation and consideration of low-price offerings and contribute to the understanding of equifinality, causal asymmetry, and valence reversals in the study of price as cue.
In two studies we investigate how voice shopping may provide access to meaningful data on customer mood and how retailers may use such data. In Study 1 we explores the use of a machine learning approach to predict customer mood based on customer commands in the voice shopping process. We compare it to a heuristic approach to customer mood prediction based on situational correlates of mood that that a smart speaker can access (weather, music choice, day of week, and daylight). In Study 2 we explore how a voice retailer could use the potential capability to predict customer mood. Our results provide evidence that knowledge of a customer’s good mood is associated to purchases of higher-priced premium brands. In addition, retailers can use mood prediction to adapt the presentation of product information to fit customer mood, thus helping customers optimize their decisions. In a sensitivity analysis, we examine how mood prediction relies on use of the explored effects.
In the hope of benefiting from the increasing focus on sustainability in Western markets, national brands are introducing new sustainable products. We investigate the success of new sustainable products with a unique dataset combining household panel data, consumer survey data, expert panel survey data, and advertising expenditure data. We show that sustainable new product introductions achieve lower sales than their conventional counterparts. Investing in corporate social responsibility activities compensates for this negative effect and is therefore a viable strategy to boost sales of new sustainable products. Importantly, making sustainable new products clearly innovative mitigates the negative effect of a sustainability claim on new product sales, whereas price promotions aggravate the negative effect. We furthermore caution that the negative effect of sustainability may not decrease as sustainability becomes more mainstream, even if our data covers a period before the currently increased interest in sustainability.
Purpose
The present research aims to identify critical antecedents of willingness to pay (WTP) for traditional bundles (those comprising only goods or services) in an emerging market context. Further, it differentiates the relative importance of the determinants of customers' WTP according to the bundle type.
Design/methodology/approach
Data were collected from Indian customers. The paper uses conjoint analysis with an orthogonal design. The experimental conditions were manipulated using vignettes.
Findings
The results indicated that purchase autonomy was considered the most important driver for customer's WTP in the case of traditional bundles. Quality variability, overall bundle quality and complementarity followed autonomy in the order of importance. Moreover, the interaction effects of autonomy and complementarity with bundle type significantly influenced the customer's WTP. Customers had a higher WTP for services bundle in high autonomy and goods bundle in high complementarity situations.
Practical implications
Retailers should allow customers to buy either the entire bundle or its components separately, irrespective of the type of traditional bundle. They should try to make bundles whose perceived quality varies significantly in the target customers. Retailers should try to keep complementary components in the goods-only bundle.
Originality/value
The present study extends the relationship of the WTP with its antecedents to traditional bundles. Earlier studies have only studied these relationships for hybrid (combination of goods and services) bundles. With the current study results, retailers can bundle traditional bundles (goods only and services only).
The salient impact of electronic Word-of-Mouth (eWOM) on firm performance has been widely noticed by scholars and practitioners. While eWOM serves as an important source of information that helps reduce perceived uncertainty risks in service purchases, it is highly likely that other sources of information are simultaneously used with eWOM in the purchase decisions. Thus, this study empirically examined the financial effects of restaurant eWOM (review volume and review rating) and their changes in the presence of brand equity. Three-stage least squares analysis was employed in the empirical investigation. Our findings revealed that review volume and review rating contributed to restaurant profitability. Brand equity was found to moderate the effects of the review attributes on restaurants profitability, which implies that eWOM has a greater influence on the financial performance of weak-branded restaurants than strong-branded ones. Implications for researchers and practitioners are discussed.
When making travel decisions, consumers are frequently exposed to a multitude of options, including differing price levels for the same product or service across a range of online travel agencies. The current research investigates how the magnitude of price dispersion in online pricing can influence travelers’ product evaluations and purchase intentions. Specifically, we predict that travelers will prefer a hotel with no price dispersion to a hotel with different prices listed when the price difference is small, or narrow. However, when the price difference is more pronounced, or wide, travelers will prefer a hotel with price differences compared to a hotel with no price dispersion. Four experiments demonstrate that this effect is consistent across different contexts and categories. Additionally, based on life history theory, we argue that the relative preference for the same versus different price dispersion will be moderated by the travelers’ childhood socioeconomic status (SES).
Purpose
This study identifies the factors that affect the knowledge of mortgage loans' total cost.
Design/methodology/approach
Empirical research utilizing a survey administered through in-home interviews was conducted. This study adopts the elaboration likelihood model (ELM) theory to analyze the influence of information shortcuts and borrowers' abilities and motivations on the knowledge of mortgage loans' total cost.
Findings
The results support that the use of the price–quality cue and brand credibility have negative and positive effects, respectively, on the knowledge of mortgage loans' total cost. Households' primary income earners have a higher knowledge of mortgage loans' total cost. The results also show that the household's primary income earners who are price conscious and brand nonbelievers have more knowledge of mortgage loans' total cost.
Originality/value
Price knowledge studies in financial services, especially in the mortgage loan industry, are scarce. Consequently, understanding the price knowledge level for mortgage loans and its potential antecedents has been insufficient.
This study examines the factors that influence what is an acceptable price for a luxury product. It considers how much people are prepared to pay for different categories of luxury products to satisfy their desire for status and to avoid public embarrassment that may result from their level of public self-consciousness. The effects of these factors, together with price consciousness, income, attachment to luxury products, and the extent to which the consumer uses price to infer the luxury level of a product, are empirically tested. Using data from U.S. consumers, the model is tested with latent moderated structural equations across nine luxury product categories. The results show that desire for status, price consciousness, and price-luxuriousness inferences influence price acceptability levels based on the product type. A series of mediating effects highlight the importance of public self-consciousness and attachment to price acceptability mainly through the price-luxuriousness inferences consumers make.
Przemysł motoryzacyjny jest w fazie głębokiej transformacji technologicznej
związanej z rosnącymi wymaganiami w zakresie redukcji emisji
spalin. W celu sprostania nowym ograniczeniom wynikającym z przepisów
mających na celu ochronę środowiska naturalnego, producenci samochodów
zmuszeni są poszukiwać nowych rozwiązań. W niniejszej publikacji
przeanalizowane zostały wyzwania dla jakości wynikające z realizacji
projektu badawczo-rozwojowego prowadzonego w celu stworzenia innowacyjnego
rozwiązania pozwalającego na obniżenia masy samochodów.
W artykule omówiono główne założenia projektu B+R oraz aspekty
związane z przygotowaniem personelu i stosowaniem narzędzi jakości.
Badania i wdrożenie są realizowane wspólnie z Instytutem Metalurgii
Żelaza przy wsparciu Narodowego Centrum Badań i Rozwoju. Głównym
wyzwaniem związanym z jakością jest uzyskanie innowacyjnego
wykroju ze stali dual i complex phase o zawężonej tolerancji płaskości
i obniżonej masie dla przemysłu motoryzacyjnego. Wartość projektu
to 14 736 990,59 zł przy wkładzie funduszy europejskich o wartości
6 019 490,24 zł.
One of the most frequent purpose of conjoint analysis is the measurement of price effects (Wittink and Cattin 1989; Wittink, Vriens, and Burhenne 1994). Usually this is be done by describing a number of product alternatives on a small number of attributes, including price, and collecting some kind of preference data for these product alternatives. From the estimated part-worth function for price one can infer price effects (Srinivasan 1979).
Evidence from past research and insights from an exploratory investigation are combined in a conceptual model that defines and relates price, perceived quality, and perceived value. Propositions about the concepts and their relationships are presented, then supported with evidence from the literature. Discussion centers on directions for research and implications for managing price, quality, and value.
An assumption in prior research on deal-prone or coupon-prone buyers has been that buying on deal is influenced in part by a household's demographic characteristics. One implication is that households that are deal-prone or coupon-prone in one product class should be so in other product classes. The authors develop a model of coupon usage across product classes that explains why households might behave consistently in their coupon usage across product classes. Purchase data are analyzed across seven product classes for each household to test the hypothesis that coupon usage is not independent across product classes and to identify differences in demographic variables and purchasing behavior between coupon-prone and non-coupon-prone households.
Not all product attributes are equally important in determining consumer preferences. This article distinguishes determinant attributes from nondeterminant ones and presents a cross-validation method for testing alternative approaches to identifying these key attributes.
The successful development of marketing strategies requires the accurate measurement of household preferences and their reaction to variables such as price and advertising. Manufacturers, for example, often offer products at a reduced price for a limited period. One reason for this practice is that it induces households to try the promoted product with the hope of retaining them as permanent customers. The successful implementation of this strategy requires knowledge of the extent of price sensitivity in the population, effective methods of advertising, and the existence of a carry-over effect in the household's evaluation of the product. Logistic regression models are often used to relate household demographics, prices, and advertising variables to household purchase decisions. In this article we extend the standard model to include cross-sectional and serial correlation in household preferences and provide algorithms for estimating the model with random effects. The model is applied to scanner panel data for ketchup purchases, and substantive insights into household preference, brand switching, and autocorrelated purchase behavior are obtained.
The authors report a study of the effects of price, brand, and store information on buyers' perceptions of product quality and value, as well as their willingness to buy. Hypotheses are derived from a conceptual model positing the effects of extrinsic cues (price, brand name, and store name) on buyers' perceptions and purchase intentions. Moreover, the design of the experiment allows additional analyses on the relative differential effects of price, brand name, and store name on the three dependent variables. Results indicate that price had a positive effect on perceived quality, but a negative effect on perceived value and willingness to buy. Favorable brand and store information positively influenced perceptions of quality and value, and subjects' willingness to buy. The major findings are discussed and directions for future research are suggested.
The objective of this article is to determine whether national brand promotions and store brands attract the same value-conscious consumers, which would aggravate channel conflict between manufacturers and retailers. The authors identify psychographic and demographic traits that potentially drive usage of store brands and national brand promotions. They then develop a framework and structural equation model to study the association of these traits with store brand and national brand promotion usage. The authors find that though demographics do not influence these behaviors directly, they have significant associations with psychographic characteristics and therefore are useful for market targeting. Most important, usage of store brands and usage of promotions, particularly out-of-store promotions, are associated with different psychographics. Store brand use correlates mainly with traits related to economic benefits and costs, whereas the use of out-of-store promotions is associated mainly with traits related to hedonic benefits and costs. These differences result in four well-defined and identifiable consumer segments: deal-focused consumers, store brand-focused consumers, deal and store brand users (use-all), and nonusers of both store brands and deals (use-none). Therefore, manufacturers and retailers have the opportunity to either avoid each other or compete head to head, depending on which segment they target.
Seven price-related constructs—five consistent with a perception of price in its “negative role” and two consistent with a perception of price in its “positive role”— are used as independent variables to predict marketplace responses/behaviors in five domains: price search, generic product purchases, price recall, sale responsiveness, and coupon redemption. The price-related constructs explain a significant amount of variance in all five domains, providing evidence of predictive validity. Results of a higher order factor analysis are also reported, which provide some support for the positive-negative perception of price taxonomy.
In a large-scale national study, the authors evaluated the effectiveness of several preference elicitation techniques for predicting choices. The criteria for accuracy included both individual hit rates and a new measure, the mean absolute error predicting aggregate share using a logit choice simulator. The central finding is that hybrid models combining information from different preference elicitation tasks consistently outperform models based on one task. For example, ACA, a method that combines a self-explicated prior with relative preference measures on pairs, predicts choices better than full-profile conjoint when warmup tasks are lacking. However, there is no difference between the models if ACA's prior is combined with the full-profile information. Further, the most accurate method combines data from all three sources, suggesting that each preference elicitation technique taps a different aspect of the choice process in the validation task. Finally, full-profile conjoint is found to be significantly more accurate after rather than before, other preference elicitation tasks, implying that its performance can be improved with warmup exercises.
In this article, the author studies the processes by which consumers’ quality perceptions of a brand in a product category are affected by their experience with the same brand in a different category. The model proposed and estimated explicitly incorporates some of the basic consumer behavior premises of signaling theory of umbrella branding (Montgomery and Wernerfelt 1992; Wernerfelt 1988). The author provides a framework to analyze the impact of marketing mix strategies in one product category on quality perceptions, consumer perceived risk, and consumer choice behavior in a different category. The model is estimated on panel data for two oral hygiene products, toothpaste and toothbrushes, in which a subset of brands share the same brand name across the two product categories. The results show strong support for the consumer premises of the signaling theory of umbrella branding.
An assumption in prior research on deal-prone or coupon-prone buyers has been that buying on deal is influenced in part by a household's demographic characteristics. One implication is that households that are deal-prone or coupon-prone in one product class should be so in other product classes. The authors develop a model of coupon usage across product classes that explains why households might behave consistently in their coupon usage across product classes. Purchase data are analyzed across seven product classes for each household to test the hypothesis that coupon usage is not independent across product classes and to identify differences in demographic variables and purchasing behavior between coupon-prone and non-coupon-prone households.
The author proposes an alternative estimation technique for quadratic and interaction latent variables in structural equation models using LISREL, EQS, and CALIS. The technique specifies these variables with single indicants. The loading and error terms for the single indicants can be specified as constants in the structural model. The author's technique is shown to perform adequately using synthetic data sets.
The research focus is individuals who have information about many kinds of products, places to shop, and other facets of the market, and initiate discussions with and respond to information requests from other consumers. Specifically, the authors develop a Likert-type scale to measure consumers’ propensity to provide general shopping and marketplace information. Consumers scoring high on this scale are referred to as “market mavens.” Based on a national sample of 1531 households, the findings indicate that market mavens exist and that other consumers recognize them. Consumers believe market mavens are influential in their purchasing decisions. The authors document the distinctness of market mavens from other influencers. They test several propositions about the market attitudes and behaviors of market mavens, but find no clear socioeconomic and demographic profile of these influencers. The results have implications for marketing managers and suggest a reexamination of the approach to information diffusion.
Not all product attributes are equally important in determining consumer preferences. This article distinguishes determinant attributes from nondeterminant ones and presents a cross-validation method for testing alternative approaches to identifying these key attributes.
The authors suggest that there is more than one type of outshopper, each type motivated by needs emanating from unique socioeconomic, life cycle, and life style perspectives. These concepts are tested with an empirical classification of outshoppers. The relationships revealed have important implications for marketers in the process of (1) developing local retail facilities and appeals to reduce loss of customers to other trade areas and (2) designing retail programs to attract consumers from contiguous trade areas.
Choice designs traditionally have been built under the assumption that all coefficients are zero. The authors show that if there are reasonable nonzero priors for expected coefficients, then these can be used to generate more statistically efficient choice designs, because the alternatives in their choice sets are balanced in utility—they have more similar choice probabilities. The authors demonstrate that the appropriate measure of choice design efficiency requires probability centering and weighting of the rows of the design matrix, and they illustrate how this criterion enables the analyst to appropriately trade off utility balance against three other principles: orthogonality, level balance, and minimal overlap. Two methods, swapping and relabeling attribute levels, provide complementary ways to increase the utility balance of choice designs. The authors apply a process for generating utility-balanced designs to five different choice designs and show that it reduces by 10–50% the number of respondents needed to achieve a specific error level around the parameters. A sensitivity analysis reveals that these gains are diminished, but still substantial, despite strong misspecifications of prior parameter estimates.
The authors report a study of the effects of price, brand, and store information on buyers’ perceptions of product quality and value, as well as their willingness to buy. Hypotheses are derived from a conceptual model positing the effects of extrinsic cues (price, brand name, and store name) on buyers’ perceptions and purchase intentions. Moreover, the design of the experiment allows additional analyses on the relative differential effects of price, brand name, and store name on the three dependent variables. Results indicate that price had a positive effect on perceived quality, but a negative effect on perceived value and willingness to buy. Favorable brand and store information positively influenced perceptions of quality and value, and subjects’ willingness to buy. The major findings are discussed and directions for future research are suggested.
The author describes a meta-analysis of econometric studies that estimated the elasticity of selective sales or market share to price. The literature review yielded 367 suitable price elasticities from about 220 different brands/markets. The results indicate that the price elasticity is significantly negative and, in absolute value, eight times larger than the advertising elasticity obtained from a prior meta-analysis. The omission of distribution or quality, the use of only cross-sectional data, and temporal aggregation lead to severe biases in the estimates of price elasticity. The elasticity also differs significantly over the brand life cycle, product categories, estimation methods, and countries.
Previous research on coupon proneness has measured the construct only in behavioral terms (i.e., consumers who are more responsive to coupon promotions are coupon prone). On the basis of the study premise that at least one other psychological construct, value consciousness, underlies the behavior of redeeming coupons, the authors argue that coupon proneness should be conceptualized and measured at a psychological level and treated as one construct that affects coupon-responsive behavior rather than as isomorphic with the behavior. They offer conceptual definitions of both coupon proneness and value consciousness and make a theoretical distinction based on acquisition-transaction utility theory. Eight hypotheses that reflect theoretical differences between the two constructs are proposed and tested. Results support the study premise that coupon-responsive behavior is a manifestation of both value consciousness and coupon proneness.
Marketing universals are defined as consumer behaviors within a segment and toward a particular product category that are invariant across cultures. Using several definitions of culture and three different criteria for universality, the authors evaluate whether the use of brand, price, retailer reputation, and physical product appearance as signals of quality are marketing universals for consumer electronics products. Using a sample representing 38 nationalities, they find that there are few differences in the use of quality signals across cultures for a high priority segment of consumers. They draw conclusions for the adaptation versus standardization debate and argue that certain behaviors are likely to be universal, whereas others are not. Understanding such differences is essential to designing international marketing strategies.
The authors examine the relative importance of extrinsic versus intrinsic cues in determining perceptions of store brand quality in an experiment using a sample of 1564 shoppers for five products. Results of the experiment suggest that consumers’ evaluations of store brand grocery items are driven primarily by the extrinsic cues that these products display rather than intrinsic characteristics. In addition, the authors found that a value for money orientation taken by retailers in the marketing of their private label lines may represent a suboptimal strategy; they recommend a quality orientation.
This article proposes an integrated product classification scheme. It is argued that, in view of the 1985 definition of marketing, one classification for all products—goods, services, and ideas—is sufficient. This classification adds “preference” products to the conventional convenience, shopping, and specialty categories. These categories are defined in terms of the effort and risk dimensions of price—as perceived by both organizational and ultimate consumers.
This paper defines hedonic consumption as those facets of consumer behavior that relate to the multisensory, fantasy and emotive aspects of product usage experience. After delineating these concepts, their theoretical antecedents are traced, followed by a discussion of differences between the traditional and hedonic views, methodological implications of the latter approach, and behavioral propositions in four substantive areas relevant to hedonic consumption—mental constructs, product classes, product usage and individual differences. Conclusions concern the usefulness of the hedonic perspective in supplementing and extending marketing research on consumer behavior.
The authors expand and integrate prior price-perceived value models within the context of price comparison advertising. More specifically, the conceptual model explicates the effects of advertised selling and reference prices on buyers’ internal reference prices, perceptions of quality, acquisition value, transaction value, and purchase and search intentions. Two experimental studies test the conceptual model. The results across these two studies, both individually and combined, support the hypothesis that buyers’ internal reference prices are influenced by both advertised selling and reference prices as well as the buyers’ perception of the product's quality. The authors also find that the effect of advertised selling price on buyers’ acquisition value was mediated by their perceptions of transaction value. In addition, the effects of perceived transaction value on buyers’ behavioral intentions were mediated by their acquisition value perceptions. The authors suggest directions for further research and implications for managers.
This exploratory study considers the role emotion plays in relationships among several constructs surrounding price. The findings suggest that some aspects of emotion—here surprise and enjoyment—play a role in consumers' responses to and use of price information. Surprise and enjoyment were found to act in concert with involvement, price consciousness, and price–quality associations in respondents' complex reactions to price. Everyone's personal experience suggests that emotions can influence people's reactions to the price of products; this research lends preliminary empirical support to such everyday experiences. The results of this exploratory study clearly point to the need for more definitive studies in the future. © 2001 John Wiley & Sons, Inc.
The statistical tests used in the analysis of structural equation models with unobservable variables and measurement error are examined. A drawback of the commonly applied chi square test, in addition to the known problems related to sample size and power, is that it may indicate an increasing correspondence between the hypothesized model and the observed data as both the measurement properties and the relationship between constructs decline. Further, and contrary to common assertion, the risk of making a Type II error can be substantial even when the sample size is large. Moreover, the present testing methods are unable to assess a model's explanatory power. To overcome these problems, the authors develop and apply a testing system based on measures of shared variance within the structural model, measurement model, and overall model.
This exploratory study considers the role emotion plays in relationships among several constructs surrounding price. The findings suggest that some aspects of emotion-here surprise and enjoyment-play a role in consumers' responses to and use of price information. Surprise and enjoyment were found to act in concert with involvement, price consciousness, and price-quality associations in respondents' complex reactions to price. Everyone's personal experience suggests that emotions can influence people's reactions to the price of products; this research lends preliminary empirical support to such everyday experiences. The results of this exploratory study clearly point to the need for more definitive studies in the future. (C) 2001 John Wiley & Sons, Inc.
Retailers use unilateral promotions (e.g., x% offer $x off) as well as competitive promotions (price-matching offers, e.g., bring a lower advertised price and we will refund the difference) to attract shoppers. We report an experiment that compares subjects' preferences for the two types of promotion in the context of a camera purchase and car-repair decision. The results suggest that the attractiveness of price-matching offers is moderated by the amount of thought subjects bring to the decision (need for cognition; n(Cog)). Low n(Cog) subjects prefer price-matching offers and associate such signals with low market prices as long as competing stores do not run any promotions. When competing stores announce unilateral discounts (e.g., 33% off), low n(Cog) subjects prefer direct discounts to price-matching offers. High n(Cog) subjects, on the other hand, are indifferent between the two types of promotion. Implications for retail strategy and consumer decision-making are discussed.
Conjoint choice experimentation involves the design of product profiles on the basis of product attributes specified at certain levels, and requires respondents to repeatedly choose one alternative from different sets of profiles offered to them, instead of ranking or rating all profiles, as is usually done in various forms of classic metric conjoint studies. The Multinomial Logit (MNL) model has been the most frequently used model to analyze the 0/1 choice data arising from such conjoint choice experiments (e.g., Louviere and Woodworth 1983; Elrod, Louviere and Davey 1992). One of the first articles describing the potential advantages of a choice approach for conjoint analysis was by Madanski (1980). His conclusion was that conjoint analysts could adopt the random utility model approach to explain gross trends or predilections in decisions instead of each person’s specific decision in each choice presented. The real breakthrough for conjoint choice came with the Louviere and Woodworth (1983) article in which they integrated the conjoint and discrete choice approaches.
The study reports the results of two experiments designed to test the role of perceived quality, perceived sacrifice, and perceived risks on consumers’ perceptions of product value. The results of the experiments involving 530 undergraduate students support the hypothesized model that suggests that perceived quality and perceived sacrifice mediate the relationships between extrinsic cues-such as price, brand, store name, and country-of-origin-and perceived performance risk and financial risk. In addition, the results indicate that perceived performance risk and financial risk mediate the relationships that perceived quality and perceived sacrifice have with perceived value. Since the findings of this research suggest both performance risk and financial risk can be reduced (thus increasing perceived value) if perceived quality is high, firms have an incentive to increase consumers’ quality perceptions by means of brand name, store, country-of-origin and price.
The authors suggest that there is more than one type of outshopper, each type motivated by needs emanating from unique socioeconomic, life cycle, and life style perspectives. These concepts are tested with an empirical classification of outshoppers. The relationships revealed have important implications for marketers in the process of (1) developing local retail facilities and appeals to reduce loss of customers to other trade areas and (2) designing retail programs to attract consumers from contiguous trade areas.
Marketing universals are defined as consumer behaviors within a segment and toward a particular product category that are invariant across cultures. Using several definitions of culture and three different criteria for universality, the authors evaluate whether the use of brand, price, retailer reputation, and physical product appearance as signals of quality are marketing universals for consumer electronics products. Using a sample representing 38 nationalities, they find that there are few differences in the use of quality signals across cultures for a high priority segment of consumers. They draw conclusions for the adaptation versus standardization debate and argue that certain behaviors are likely to be universal, whereas others are not. Understanding such differences is essential to designing international marketing strategies.
The author proposes an alternative estimation technique for quadratic and interaction latent variables in structural equation models using LISREL, EQS, and CALIS. The technique specifies these variables with single indicants. The loading and error terms for the single indicants can be specified as constants in the structural model. The author's technique is shown to perform adequately using synthetic data sets.
In a large-scale national study, the authors evaluated the effectiveness of several preference elicitation techniques for predicting choices. The criteria for accuracy included both individual hit rates and a new measure, the mean absolute error predicting aggregate share using a logit choice simulator. The central finding is that hybrid models combining information from different preference elicitation tasks consistently outperform models based on one task. For example, ACA, a method that combines a self-explicated prior with relative preference measures on pairs, predicts choices better than full-profile conjoint when warmup tasks are lacking. However, there is no difference between the models if ACA's prior is combined with the full-profile information. Further, the most accurate method combines data from all three sources, suggesting that each preference elicitation technique taps a different aspect of the choice process in the validation task. Finally, full-profile conjoint is found to be significantly more accurate after rather than before, other preference elicitation tasks, implying that its performance can be improved with warmup exercises.
This study is a critical reassessment and extension of De Wulf et al.'s (2001) framework investigating retail investments in consumer relationships. Their initial model relates four types of relationship marketing efforts to perceived relationship investment, in turn influencing relationship quality and ultimately behavioural loyalty. Based upon signalling theory, we extend this model by introducing product and service efforts as additional antecedents. Moreover, in contrast to the use of self-reported measures in the initial model, we apply customer database information in order to measure the construct of behavioural loyalty. Based upon 187 consumers reporting on their relationship with a Belgian apparel retailer, the SEM results provide guidelines for retailers how to increase the quality of their relationships with consumers by strengthening consumers' perceptions of relationship investment.
Previous research on coupon proneness has measured the construct only in behavioral terms (i. e., consumers who are more responsive to coupon promotions are coupon prone). On the basis of the study premise that at least one other psychological construct, value consciousness, underlies the behavior of redeeming coupons, the authors argue that coupon proneness should be conceptualized and measured at a psychological level and treated as one construct that affects coupon-responsive behavior rather than as isomorphic with the behavior. They offer conceptual definitions of both coupon proneness and value consciousness and make a theoretical distinction based on acquisition-transaction utility theory. Eight hypotheses that reflect theoretical differences between the two constructs are proposed and tested. Results support the study premise that coupon-responsive behavior is a manifestation of both value consciousness and coupon proneness.
The authors report the results of two experiments designed to test the effects of extrinsic cues—price, brand name, store
name, and country of origin—on consumers’ perceptions of quality, sacrifice, and value. The results of the experiments support
hypothesized linkages between (a) each of the four experimentally manipulated extrinsic cues and perceived quality, (b) price
and perceived sacrifice, (c) perceived quality and perceived value, and (d) perceived sacrifice and perceived value. The results
also indicate that the linkages between the extrinsic cues and perceived value are mediated by perceived quality and sacrifice.
Choice designs traditionally have been built under the assumption that all coefficients are zero, The authors show that if there are reasonable nonzero priors for expected coefficients, then these can be used to generate more statistically efficient choice designs, because the alternatives in their choice sets are balanced in utility - they have more similar choice probabilities. The authors demonstrate that the appropriate measure of choice design efficiency requires probability centering and weighting of the rows of the design matrix, and they illustrate how this criterion enables the analyst to appropriately trade off utility balance against three other principles: orthogonality, level balance, and minimal overlap. Two methods, swapping and relabeling attribute levels, provide complementary ways to increase the utility balance of choice designs. The authors apply a process for generating utility-balanced designs to five different choice designs and show that it reduces by 10-50% the number of respondents needed to achieve a specific error level around the parameters. A sensitivity analysis reveals that these gains are diminished, but still substantial, despite strong misspecifications of prior parameter estimates.