John G. Lynch

Reconsidering Baron and Kenny: Myths and Truths about Mediation Analysis

Baron and Kenny’s procedure for determining if an independent variable affects a dependent variable through some mediator is so well known that it is used by authors and requested by reviewers almost reflexively. Many research projects have been terminated early in a research program or later in the review process because the data did not conform to Baron and Kenny’s criteria, impeding theoretical development. While the technical literature has disputed some of Baron and Kenny’s tests, this literature has not diffused to practicing researchers. We present a nontechnical summary of the flaws in the Baron and Kenny logic, some of which have not been previously noted. We provide a decision tree and a step-by-step procedure for testing mediation, classifying its type, and interpreting the implications of findings for theory building and future research.

Memory and Attentional Factors in Consumer Choice: Concepts and Research Methods

While consumer researchers have evinced considerable interest in cognitive processes in decision making, work has centered on the conscious mental manipulation of product information. This paper addresses memory and attentional processes that may occur below the level of consciousness. Methods developed within the field of cognitive psychology are presented to supplement the standard process tracing methods commonly used by consumer researchers.

Choices from Sets Including Remembered Brands: Use of Recalled Attributes and Prior Overall Evaluations

Consumers faced choices in which some or all alternatives had to be recalled from memory. Experiments 1 and 2 investigated conditions that lead consumers to use recalled prior evaluations versus recalled brand attribute information as inputs to brand choices. Results suggest that consumers use a potential input to make a choice if it is accessible in memory and if they perceive it as more diagnostic than other accessible potential inputs. The theoretical framework used to interpret these results has the potential to integrate past work on affect referral, the link between memory and judgment, and the role of attitudes in choice.

On the External Validity of Experiments in Consumer Research

This paper is concerned with generalizability issues in experimental consumer research. In particular, it discusses how the usefulness of experimental results is affected by a consumer researchers treatment of unmanipulated “background” factors in designing and analyzing the experiment.

Communication Effects of Advertising versus Direct Experience When both Search and Experience Attributes Are Present

Previous research has predicted that direct product experience will be superior to advertising in communicating information about products. In experiment 1 of the present study, claims about search attributes were better recognized and beliefs about search attributes were more accessible and more confidently held after exposure to ads in comparison with direct experience of two inexpensive packaged products. Experiment 2 replicated the above effects on claim recognition, belief accessibility, and confidence for two consumer durables under low-involvement conditions. It also showed that search attributes were more frequently mentioned and were rated as more important after exposure to advertising than after direct experience; the opposite was true for experience attributes. These effects on frequency of mention and attribute importance were significantly weaker under high-involvement than under low-involvement conditions. Copyright 1995 by the University of Chicago.

Error Detection by Industry‐Specialized Teams during Sequential Audit Review

To improve audit effectiveness, public accounting firms have organized their practices to include hierarchical review by teams organized along industry lines. We examine how industry specialized auditor teams detect errors, using a sophisticated experimental design. Our analysis of nominal teams created from seniors and managers working individually shows that seniors add value to the team by detecting more mechanical errors while managers detect more conceptual errors. Working within specialization, managers and seniors both contribute in a nonredundant way to the team’s overall effectiveness. We also find that the nominal teams outperform real teams in the detection of mechanical but not conceptual errors. These results only hold when the auditors work within in their industry specialization. Out of specialization the auditors are not effective at detecting errors, and real teams perform below the nominal team benchmark in the detection of both mechanical and conceptual errors.

Theory and external validity

Winer (1999 [this issue]) proposes that external validity concerns require more attention in theoretical research. The author argues that one cannot “enhance” external validity by choosing one method over another. External validity can only be “assessed” by better understanding how the focal variables in one’s theory interact with moderator variables that are seen as irrelevant early in a research stream. Findings from single real-world settings and specific sets of “real” people are no more likely to generalize than are findings from single laboratory settings with student subjects. Both the laboratory and real world vary in background facets of subject characteristics, setting, context, relevant “history,” and time. It is only when these facets vary and we see how they interact that understanding of external validity is enhanced. For this to happen, the observable “background” factors have to be conceptualized in terms of more general constructs and incorporated as moderators into the researcher’s theory. Enriched theory—not method—confers confidence in our understanding of whether effects will be robust or highly contingent. To map this knowledge to some specific substantive system requires an added step of understanding the mapping from observables in that system onto theoretical constructs. The author proposes “friendly amendments” to Winer’s three proposals to pursue a better understanding of external validity through theory.

Prior Knowledge and Complacency in New Product Learning

Our research examines the role of prior knowledge in learning new product information. Three studies demonstrate that, compared to consumers with lower prior knowledge, those with higher prior knowledge learn less about a new product. Further, higher knowledge consumers are able to learn more but learn less due to motivational deficits; inferior learning of new product information by those with higher prior knowledge is caused by inattention at encoding rather than reconstructive errors at retrieval. These results hold both when prior knowledge is manipulated experimentally (studies 1 and 2) and when it is an individual difference factor (study 3).

Smart Agents: When Lower Search Costs for Quality Information Increase Price Sensitivity

Recent consumer research suggests that lowering search costs for quality information reduces consumer price sensitivity by creating greater perceived differentiation among brands (e.g., Kaul and Wittink 1995; Lynch and Ariely 2000). We argue that lowering quality search costs by smart agents can have the opposite effect on differentiation and price sensitivity. Smart agents screen through a universe of alternatives, recommending only a handful well-matched to the customers quality preferences. In this research, we ask and answer the following questions: In markets in which price and quality are uncorrelated, will the use of screening agents increase or decrease prices paid compared to searching from an unordered list of options? Will increasing the size of the stores underlying assortment increase or decrease prices paid when options have been screened on quality? In markets where higher priced goods have higher quality, will the use of screening agents increase or decrease prices paid and quality selected? Experiments 1 and 2 test the effect of quality screening when price and quality are uncorrelated. We then present an analytic model for markets in which price and quality are correlated. We deduce that ordering can cause price and quality to increase or decrease depending on the slope of the price-quality relationship in comparison with the relative importance of price in the utility function. We find support for this model in experiment 3. Copyright 2003 by the University of Chicago.

Toward a Reconciliation of Market Power and Information Theories of Advertising Effects on Price Elasticity

Prior work on the economic effects of advertising has presented conflicting views. Some authors have suggested that advertising creates market power by artificially differentiating brands and thereby lowering price elasticity. Others have viewed advertising as an efficient source of information about the existence of substitutes, arguing that advertising increases price elasticity. The present research proposes a unifying theoretical model in which advertising affects price elasticity through its influence on two mediating constructs: the size of the consideration set and the relative strength of preference. Pretests 1 and 2 examine the effects of advertising on these two constructs. Results from the main experiment show that, in accordance with the theoretical framework, the same advertisements that increased price elasticity in some decision environments decreased it in others. Copyright 1995 by the University of Chicago.