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The double benefits of consumer certainty: combining risk and range effects

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<mark>Journal publication date</mark>12/2015
<mark>Journal</mark>Marketing Letters
Issue number4
Volume26
Number of pages16
Pages (from-to)473-488
Publication StatusPublished
Early online date13/02/14
<mark>Original language</mark>English

Abstract

We investigate consumer certainty as an important dimension of attitude strength and explore its influence on willingness to pay (WTP) ranges. WTP ranges are defined by two thresholds (floor/minimum and ceiling/maximum reservation price); their difference indicates the degree of (un)certainty. Across five studies (online, laboratory, and field experiments plus a field survey) with more than 25,000 participants, we find that increased consumer certainty generates an asymmetric shift in the WTP thresholds, such that the floor price increases more strongly than the ceiling price, which also implies a reduction in the WTP range. Consequently, this research specifies predictions offered by choice models that use Bayesian learning. The asymmetric effects appear, irrespective of the source of uncertainty, so our study advances understanding of whether consumers differ in their behavior as a consequence of preference or product performance uncertainty.