The impact of regulatory review time on incremental and radical innovation: evidence from the high-risk medical device market

Journal of Regulatory Economics - We theoretically and empirically study the effect of variation in regulatory review time on firms’ choices between radical and incremental innovations. We...     

Book review

Many households include a family member with a disability. For these households, who consumes together, where they consume and when the consumption occurs often represent a complicated, nuanced set of tradeoffs. Based on in-depth interviews with families that include a child with a disability, we examine how a family makes an inclusion/exclusion decision and how the decision factors into the ongoing project of creating the family that is uniquely theirs. The analysis suggests that the decision-making is closely tied to the nature of the child's disability and that the type of disability is central to the family's narrative regarding its decision. Also, an important driver of the family's inclusion/exclusion decision is the process of self-stigmatization by non-disabled family members. The analysis shows that the implications of who in the family is included in the consumption, and the experience the family has as a result of the inclusion/exclusion decision reflect and reinforce the collective family's identity.     

Special fonts: The competing roles of difficulty and uniqueness in consumer inference

The use of special fonts in marketing communications may have more complex effects than expected. This study examines multiple effects of special fonts and proposes boundary conditions for the effects. Special fonts are perceived as more unique and difficult to read than regular fonts. Five experimental studies show that whereas the perception of uniqueness decreases the awareness of missing information, leading to more favorable initial judgments but a higher likelihood of regret later, the perception of difficulty has the opposite effects. These competing effects are moderated by contextual cues that vary the salience of uniqueness versus difficulty associated with special fonts. Specifically, consumers are more influenced by the uniqueness of special fonts when they rate the degree of uniqueness before the degree of difficulty or when they evaluate a product category (e.g., a handmade item or a décor) that is generally expected to be unique. On the contrary, they are more influenced by difficulty when they rate difficulty first or when they evaluate a product category (e.g., “a tax preparation service”) that is unexpected to be unique. Implications of the results for understanding the effects of fonts on information processing and consumer inference are discussed.     

Blissful Insularity: When Brands are Judged in Isolation from Competitors

The need to evaluate a single brand in isolation, without explicit comparisons to competitors, is ubiquitous in consumer judgment because competitors are often not readily apparent. Although consumers routinely make such judgments, in this paper we show that when a brand is judged in isolation, the judgment is often overly favorable. Moreover, we explore when and why this tendency occurs. Data from 259 participants across 3 experiments that considered very different product categories, and that were conducted with student and adult consumer samples, converge to show that; (1) isolated brand evaluations on average are characterized by a favorableness bias, (2) this bias results from consumers' selective processing of information about the focal brand, (3) favorableness bias is attenuated if context leads consumers to consider alternatives to a salient focal brand, and (4) the isolated brand judgments of experts are much better calibrated than are those of novices.     

The effect of message credibility,need for cognitive closure,and information sufficiency on thought-induced attitude change

Marketing Letters - Self-generated thought has been shown to have a significant impact on attitude change. Merely thinking about an attitude can result in more extreme attitudes. Although research...     

Using imagine instructions to induce consumers to generate ad-supporting content

Some recent advertisements attempt to increase persuasiveness by directly asking consumers to imagine arguments supporting the ad's message. This research provides a critical test of the effectiveness of this imagine strategy, while also identifying specific situations in which this technique can be most effective in increasing persuasion. Three studies reveal that imagine instructions are most effective when there is a lack of fit between consumers' regulatory orientation and the ad content, when consumers are dispositionally oriented toward a high need for cognitive closure, and when consumers are at a high construal level. These results are consistent with the possibility that the imagine strategy is most effective when used to enhance the motivation level of otherwise unmotivated consumers.     

Last-Minute Bidding in Sequential Auctions with Unobserved, Stochastic Entry

Using a dataset of calculator auctions on eBay, we first show that last-minute bidding is not merely the result of bidders’ going to the next-to-close auction. Instead, bidding is concentrated at the end of the period in which the auction is the next to close, suggesting the existence of strategic last-minute bidding. Then, we model repeated, ascending price auctions for homogeneous goods with unobserved, stochastic entry. We show that the dynamic game has a pure-strategy symmetric equilibrium in which entrants always reveal themselves by bidding in the auction in which they arrive, and bidding occurs at the last minute.     

The scope of auctions in the presence of downstream interactions and information externalities

We scrutinize the scope of auctions for firm acquisitions in the presence of downstream interactions and information externalities. We show that no mechanism exists that allows an investor to acquire a low-cost firm under incomplete information: a separating auction implies adverse selection and relies substantially on commitment to allocation and transfer rules. A pooling auction serves as a commitment device against ex-post opportunistic behavior and alleviates adverse selection. It can earn the investor a higher expected payoff than a separating auction, even when consistency is required as to qualify for a sequential equilibrium.     

Non-Conscious Influences on Consumer Choice

While consumer choice research has dedicated considerable research attention to aspects of choice that are deliberative and conscious, only limited attention has been paid to aspects of choice that occur outside of conscious awareness. We review relevant research that suggests that consumer choice is a mix of conscious and nonconscious influences, and argue that the degree to which nonconscious influences affect choice is much greater than many choice researchers believe. Across a series of research domains, these influences are found to include stimulus that are not consciously perceived by the consumer, nonconscious downstream effects of a consciously perceived stimuli or thought process, and decision processes that occur entirely outside of awareness.     

Correction Processes in Consumer Choice

Consumers sometimes recognize that irrelevant contextual factors may influence their judgments and decisions. When such factors are detected, consumers might engage in correction processes to counteract unwanted influences in their judgments and decisions. An experiment demonstrated that correction processes can reduce the magnitude of the compromise effect and the attraction effect.