Dipayan Biswas

Economics of information in the Web economy: Towards a new theory?

Abstract As a shopping interface, the Web possesses certain unique attributes, which necessitates a reevaluation of the implications and validity of traditional theories of consumer behavior. Because the acquisition and management of information is drastically different in an online setting, traditional theories of information search behavior might have to be modified to suit the Web environment. This article examines how two key aspects of the traditional Economics of Information (EoI) theory, price dispersion and search efficiency , are likely to be impacted differentially due to the characteristics of the Web. A set of theoretical propositions is presented, which suggests that the Web will influence our views of the traditional EoI theory in the areas of product/information versioning, antecedents of price dispersion, relationship between price dispersion and amount of search, role of search agents and the effect of search efficiency on search behavior.

Individual effects of product quality signals in the presence versus absence of other signals: differential effects across brick‐and‐mortar and online settings

Purpose – The purpose of this paper is to study the effectiveness of multiple signals. Specifically, the paper investigates how the individual strength of a marketplace signal varies as a function of whether consumers are exposed to that signal alone or in combination with another signal.Design/methodology/approach – The research uses experimental designs to empirically address the research questions. Hypotheses are formulated primarily based on signaling theory and these hypotheses are tested with laboratory experiments using real consumers.Findings – The key finding is that a signals stand‐alone credibility largely determines whether its individual strength would be diluted or augmented by the coexistence of another signal. Further, when signals with different stand‐alone strengths coexist, the individual strength of the weaker signal is higher than when that signal is present alone. These effects are observed in brick‐and‐mortar and online shopping media.Originality/value – Past research reports mixed...

The Impact of Sequential Data on Consumer Confidence in Relative Judgments

We examine how consumers update their confidences in ordinal (relative) judgments while evaluating sequential product-ranking and source-accuracy data in percentage versus frequency formats. The results show that when sequential data are relatively easier to mathematically combine (e.g., percentage data), consumers revise their judgments in a way that is consistent with an averaging model but inconsistent with the normative Bayesian model. However, when the sequential data are difficult to mathematically combine (e.g., frequency data), consumers update their confidence judgments in a way that is more consistent with the normative Bayesian model than with an averaging model. Interestingly, greater processing motivation for sequential frequency data leads to updated confidence judgments that are lower than normative Bayesian predictions but consistent with the averaging model. Overall, the results of the experiments reveal counterintuitive findings; updated confidence judgments are higher and more accurate when sequential data are more difficult to process and also when consumers have lower processing motivation.

How Smooth Does It Feel? The Effects of Haptics on Consumers’ Nutritional Perceptions

We investigate how haptic properties of a food influence consumer’s perceptions of the food’s nutritional content. The results of two laboratory studies and one field study show that consumers perceive foods with smooth textures as higher in calories, fat, and overall less healthy than foods with rough textures, and that satiation moderates these effects. Based on these findings we discuss implications for consumers and marketers.

Product Information Presented as Ratios and Consumer Processing Modes: can Analytical Processing Lead to More Biased Judgments for Certain Ratio Formats?

The results of three experiments show that while computing averages of data in ratio formats, such as detergent usage information in “loads per container” or exercise routine information in “calories burned per minute,” consumers tend to make inaccurate judgments. Paradoxically, more thorough processing further accentuates the inaccuracy.

The Effects of Ambient Light on Consumer Product Choices

Stores and restaurants vary considerably when it comes to ambient light intensity with some stores and restaurants being very bright and others being very dim. But, would the ambient light intensity in a store or restaurant influence a consumer’s choices between virtue and vice products? We focus mostly on virtue and vice products in the context of healthy and unhealthy foods. However, we also extend our results to a non-food context. We predict that dim ambient lighting will lead to an increased preference for vice products and propose two theoretical explanations for why this may occur. Specifically, theories related to mental alertness would predict that consumers would be less mentally alert and more sleepy in dim (vs. bright) lighting. Theories related to disinhibition would also predict a greater preference for vices in dim lighting, since consumers tend to feel anonymous in dimly lit environments. Across, five experimental studies, two conducted in field settings at restaurants and three conducted in the lab, we test our hypothesis regarding the greater preference for vice products in dim lighting and empirically investigate which of the two competing theoretical explanations might be more dominant in driving this effect. Collectively, the results support our hypothesis and show that consumers choose vices to a greater extent in dim (vs. bright) lighting. Process evidence supports the mental alertness model and not the disinhibition model.

Confidence in Ordinal Judgments: Role of Consumer Metacognition and Implications for Bayesian Updating

Consumers often make ordinal judgments regarding product performances based on product ranking information. Using a consumer metacognition theoretical framework, we examine how such product ranking information in different formats might influence consumer confidence in their ordinal judgments, and the extent to which they are consistent with the normative Bayesian model.

Order Effects of Sampling Experiential Products: The Role of Product Similarity

Consumers often get to sample experiential products that are rich on sensory aspects before making purchase decisions; examples of such products include food/beverages, fragrances, and video/audio clips (Shapiro and Spence 2002; Shiv and Nowlis 2004). Despite the widespread prevalence of such sampling practices, it is not clear as to how the order in which different types of experiential products (that might be similar versus dissimilar) are sampled influences consumers’ final choices regarding the products. We propose that when sequentially sampled products are similar to each other (in terms of sensory cues such as taste, color, smell), there will be a more favorable evaluation of the product sampled sequentially first. In contrast, when sequentially sampled products are dissimilar there will be a more favorable evaluation of the product sampled sequentially last. To the best of our knowledge, this is the first research to examine how consumer sampling of experiential products are influenced by the level of similarity /dissimilarity between the sensory aspects of sampled products.