No abstract

Many product categories, from pizzas to real estate, present buyers with purchase decisions involving complex area judgments. Does a square look larger or smaller than a circle? How much smaller does a circle of 8-inch diameter look when compared to one with a 10-inch diameter? In this paper, we propose a psychophysical model of how consumers make area comparison judgments. The model involves consumers making effort-accuracy trade-offs that lead to heuristic processing of area judgments and systematic shape- and size-related biases. The model is based on four propositions: P1. Consumers make an initial comparison between two figures based on a single dimension; P2. The dimension of initial comparison—the primary dimension—is the one that is most salient to consumers, where salience is figure and context dependent; P3. Consumers insufficiently adjust an initial comparison using a secondary dimension, which we assume to be orthogonal to the primary dimension used for the initial comparison; and P4. The magnitude by which the initial comparison is adjusted is directly related to the relative salience of the secondary dimension versus the primary dimension. The model predicts that a single linear dimension inappropriately dominates the two-dimensional area comparison task and that contextual factors affect which linear dimension dominates the task. The relative use of the second dimension depends on its relative salience, which can be influenced in a variety of ways. The model extends the area estimation literature in cognitive psychology by exploring new biases in area estimation and is able to resolve controversial effects regarding which shape is perceived to be “bigger,” the square or the circle, by incorporating contextual factors into model specifications. A set of six studies—five laboratory experiments and one field experiment—systematically test model predictions. Study 1 is a process study that shows that when two dimensions are available to make an area comparison judgment, people choose one of those to be the primary dimension, with the other being the secondary dimension. Furthermore, it shows that the choice of the primary dimension is dependent on its relative salience that can be contextually manipulated via manner of visual presentation. Studies 2 and 3 show how the use of a diagonal versus the side of a square (contextually determined) can affect whether a square is perceived to be smaller or larger than a circle of the same area. Study 3 extends the investigation to the domain of the price people are willing to pay for “pizzas” of different shapes, presented differently. Study 4, a field study, demonstrates external validity by showing that purchase quantities are greater when a circular package is expected to contain less than a rectangular package of the same volume in a domain where consumption goal is constant (cream cheese with a bagel). Studies 5 and 6 examine ways in which one can increase the salience of the secondary dimension, in a size estimation task, i.e., judging the rate of increase of area. While Study 5 does so via contextual visual cues (incorporating lines that draw one's attention to the underused dimension), Study 6 does the same using semantic cues that direct attention to a single dimension (e.g., diameter) or the total area and comparing these with a visual presentation of the figure. Overall, results suggest that the manner in which information is presented affects the relative salience of dimensions used to judge areas, and can influence the price consumers are willing to pay. Underlining the external validity of these findings, container shape can significantly affect quantity purchased and overall sales. The paper highlights biases in area comparison judgments as a function of area shape and size. The model is parsimonious, demonstrates good predictive ability, and explains seemingly contradictory results in the cognitive psychology literature. Implications for pricing, product design, packaging, and retailing are suggested.

The focus of this article is the persistent continued strength of "wet markets" in Hong Kong and the weakness of supermarkets in the fresh food area. This phenomenon is surprising because, based on the experiences in North America and Western Europe and given the well-developed economy of Hong Kong, one would have expected supermarkets to dominate fresh food retailing and wet markets to be in retreat. In this article, the authors explain the reasons for the continued dominance of wet markets. They argue that consumers'shopping and consumption culture, the effectiveness of wet markets in handling consumers'needs, and the appropriateness of the simple technology used by wet markets are at the basis of this dominance. An analysis of developments in the wet market system, in the supermarkets, and in consumers' behavior leads to a conclusion that there are no indications of possible changes in wet markets' superiority.

No abstract

The extremely short life cycle and the rapid decay in revenues after opening coupled with the rapid and frequent introduction of new competitive products makes the timing of new product introductions in the motion picture industry critical, particularly during the high-revenue Christmas and summer seasons. Each studio wants to capture as much of the season as possible by opening early in the season. At the same time, each wants to avoid head-to-head competition. The authors model competition between two motion pictures in a share attraction framework and conduct an equilibrium analysis of the product introduction timing game in a finite season. The following three different equilibrium configurations emerge: (1) a single equilibrium with both movies opening simultaneously at the beginning of the season, (2) a single equilibrium with one movie opening at the beginning of the season and one delaying, and (3) dual equilibria, with either movie delaying opening. A key factor is the product life cycle, which can be captured well with a two-parameter exponential decline. The authors relate the life-cycle parameters to these possibilities with the general result that the weaker movie may be forced to delay opening. These results are related to case studies of the opening of recently released movies. A statistical analysis of the 1990 summer season in North America provides support for the conclusions and suggests that current release timing decisions can be improved. The authors discuss the rationale of “avoiding the competition” in the general context of product introduction timing.