Different strategies for evaluating consumer products: Attribute- and exemplar-based approaches compared

Abstract

JEL classification: D12 M31PsycINFO Classification: 2340 3900 3920 Keywords:Consumer behavior Mathematical modeling Judgment and decision making Bayesian statistics a b s t r a c t Consumers' purchase decisions depend on whether a product is perceived as a bargain or as overpriced. But how do consumers evaluate sales prices? The standard approach in economics, psychology, and marketing suggests that consumers' estimates are best described by a attribute-based or piecemeal strategy that integrates information about products in a linear additive fashion. Here, we outline and test an alternative theoretical approach from the categorization literature suggesting that consumers sometimes follow an exemplarbased strategy that relies on similarity to previously encountered products. We hypothesize that people switch between these two estimation strategies depending on the context they face. To test this hypothesis, we conducted an experiment in which 64 participants repeatedly estimated the market price of different consumer products (bottles of wine). In one condition, the product prices could be well approximated with an attribute-based strategy whereas in the other condition an exemplar-based strategy worked best. Results of a subsequent testing phase indicated that participants switched between strategies depending on the structure of the presented sets. These results show that people rely on different strategies to estimate market prices, which should influence people's consumption behavior. The results suggest that theories on categorization learning can provide a deeper insight into behavior in an economic context and allow predicting consumer behavior more accurately.

How Social and Non-Social Information Influence Classification Decisions: A Computational Modelling Approach

“…The probability with which the mushroom is classified is a function of its similarity to the retrieved edible mushrooms in comparison to the retrieved non-edible mushrooms. Exemplar models are frequently used to understand the cognitive processes underlying classifications and have been successfully employed to explain a large range of behavioural phenomena (Hoffmann, von Helversen, & Rieskamp, 2014;Nosofsky & Johansen, 2000;Olsson, Juslin, & Olsson, 2006;Scheibehenne, von Helversen, & Rieskamp, 2015;von Helversen, Karlsson, Mata, & Wilke, 2013 ;von Helversen, Mata, & Olsson, 2010). Here, we used the general context model (GCM; Nosofsky, 1986;Nosofsky & Johansen, 2000) to describe classifications using non-social information and then extended the GCM to incorporate social information according to either a single-step or a two-step integration process.…”

Reference points in consumer choice models: A review and future research agenda

“…Attribute‐based referencing means that consumers’ evaluation of a multi‐attribute product is formed through the weighted‐additive strategy, that is, the available attribute information is multiplied by its importance, and then, additively integrated (Scheibehenne et al., 2015). The attribute‐based referencing involves constructing reference points for each attribute, and then, comparing the reference points with the corresponding attributes of different alternatives (Bhargava et al., 2000; Tereyağoğlu et al., 2017).…”

The effect of attribute alignability on brand evaluation in a competitive context: The moderating role of regulatory mode

“…That is, we sought to examine how consumer's regulatory motivation affects consumer product purchase decision focusing on attribute‐based processing. However, in the inter‐product comparisons, product information is evaluated not only by attribute‐based processing but by alternative (brand) based processing as well (Jang & Yoon, 2016; Scheibehenne et al, 2015). In today's competitive market situation, managing a brand strategically in terms of brand positioning and brand consumer relationships is necessary for the survival of the brand because a brand is an invisible yet a key asset to a company (Paul, 2018).…”