Unraveling the Fallacy of Expertise: Exploring the Influence of Product-Related Experience on Consumer Perception of Product Knowledge

Abstract

This paper investigates the impact of product-related experience on consumers’ perception of their knowledge about extended warranties for automobiles in Germany and its implications for sustainability. Utilizing a structural equation model and analyzing data from 467 participants, the study explores the influence of general self-confidence and product-related experience on both subjective and objective knowledge. The empirical findings highlight that while high general self-confidence and product-related experience significantly shape participants’ subjective knowledge, they do not have a similar impact on objective knowledge. Notably, previous possession, representing the highest level of product-related experience, emerges as the primary influencing factor on participants’ subjective knowledge. Surprisingly, subjective and objective knowledge does not significantly influence participants’ willingness to pay. The analysis presented in this paper underscores the importance of understanding the distinction between self-perceived knowledge and objective knowledge, particularly concerning extended warranties for automobiles and the need for accurate knowledge dissemination to inform sustainable consumer choices.