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Innovations commonly involve changes to iterated market offerings (e.g., new games, car models, film sequels). To better understand consumer iteration responses, the authors develop and test a theoretical framework grounded in (1) prior innovations serving as reference states (comparators) for later innovations and (2) consumer desires for both comfort and stimulation. In Study 1's online game, prior innovations and loss aversion (greater loss than gain impact) moderate evaluations of current innovations, whereby an introduction-weaker-stronger innovation sequence (Periods 1–3 of four periods) generates more entertainment than an introduction-stronger-weaker sequence because the former's weak-opening-then-rise does less harm than the latter's strong-opening-then-drop. Study 2 replicates Study 1 and shows that an introduction-weaker-weaker sequence produces enough habituation and diminishing negative returns to outperform an introduction-stronger-weaker sequence at Period 4. Study 3 offers marketplace corroboration with a film industry test in which minor (fewer) innovations perform better (e.g., sales, return on investment) earlier in franchises, whereas major (many) innovations perform better later, thereby reconciling prior research's opposing prescriptions for the use of major versus minor sequel innovations. The framework and results implicate carefully sequenced innovations for managing consumer iteration responses, including the possibility of interspersing weaker/minor innovations among stronger/major innovations.

Prior research has demonstrated various effects of exposure to thin-idealized models in advertisements on consumers' product evaluations. Although this past research provides important insights, it does not take into account that many of these thin-idealized images have been digitally manipulated. The present work studies the consequences of disclosure of this digital manipulation and the process consumers engage in when evaluating the brands responsible for these advertisements. We demonstrate that retouched advertisements may, contrary to conventional wisdom, have favorable consequences. Indeed, we show that individuals have more favorable brand attitudes for retouched (vs. unretouched) ads when retouching is disclosed (vs. undisclosed). We show that disclosed retouched ads utilize a two-sided persuasive appeal, therefore leading consumers to evaluate the brand more favorably. We replicate this effect and explore attractiveness-relevant products and type of disclosure as boundary conditions. K E Y W O R D Sadvertising disclosure, attractiveness-relevant products, digital manipulation, mandated disclo- sure, persuasive appealsThe girl in this photo has not been retouched! the real you is sexy! American Eagle's lingerie line, Aerie Advertising Campaign

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