Nicholas H. Lurie

Searching for Experience on the Web: An Empirical Examination of Consumer Behavior for Search and Experience Goods

By lowering the costs of gathering and sharing information and offering new ways to learn about products before purchase, the Internet reduces traditional distinctions between search and experience goods. At the same time, differences in the type of information sought for search and experience goods can precipitate differences in the process through which consumers gather information and make decisions online. A preliminary experiment shows that though there are significant differences in consumers’ perceived ability to evaluate product quality before purchase between search and experience goods in traditional retail environments, these differences are blurred in online environments. An analysis of the online behavior of a representative sample of U.S. consumers shows that consumers spend similar amounts of time online gathering information for both search and experience goods, but there are important differences in the browsing and purchase behavior of consumers for these two types of goods. In particular, experience goods involve greater depth (time per page) and lower breadth (total number of pages) of search than search goods. In addition, free riding (purchasing from a retailer other than the primary source of product information) is less frequent for experience than for search goods. Finally, the presence of product reviews from other consumers and multimedia that enable consumers to interact with products before purchase has a greater effect on consumer search and purchase behavior for experience than for search goods.

Visual Representation: Implications for Decision Making

A large number of visualization tools have been created to help decision makers understand increasingly rich databases of product, customer, sales force, and other types of marketing information. This article presents a framework for thinking about how visual representations are likely to affect the decision processes or tasks that marketing managers and consumers commonly face, particularly those that involve the analysis or synthesis of substantial amounts of data. From this framework, the authors derive a set of testable propositions that serve as an agenda for further research. Although visual representations are likely to improve marketing manager efficiency, offer new insights, and increase customer satisfaction and loyalty, they may also bias decisions by focusing attention on a limited set of alternatives, increasing the salience and evaluability of less diagnostic information, and encouraging inaccurate comparisons. Given this, marketing managers are advised to subject insights from visual representations to more formal analysis.

Decision Making in Information-Rich Environments: the Role of Information Structure

Todays consumers are often overloaded with information. This article argues that traditional approaches to measuring the amount of information in a choice set fail to account for important structural dimensions of information and may therefore incorrectly predict information overload. Two experiments show that a structural approach to measuring information, such as information theory, is better able to predict information overload and that information structure also has important implications for information acquisition. A Monte-Carlo simulation, in which decision rules are applied to multiple information environments, shows that the amount of information processing mediates the relationship between information structure and information overload.

A Consumer Perspective on Price-Matching Refund Policies: Effect on Price Perceptions and Search Behavior

Although price-matching refund policies are common in many retail environments, the impact of such policies on consumers has largely been ignored. This article reports the results of three studies that examine price-matching policies from a consumer perspective. Study 1 shows that consumers perceive price-matching policies as signals of low store prices and that the presence of a refund increases the likelihood of discontinuing price search. Contrary to the predictions based on signaling theory in information economics, studies 2 and 3 show that when search costs are low, the number of stores searched increases in the presence versus absence of a price-matching policy. When search costs are high, consumers appear to accept the price-matching signal at face value and search less in the presence of a refund. The article concludes by discussing the theoretical implications of the findings and suggesting directions for future research.

Listening to Strangers: Whose Responses are Valuable, How Valuable Are They, and Why?

Marketing managers and consumers who use the Web as a source of information often use input from strangers to make decisions or gain knowledge. The authors propose that in such contexts, the information providers current and past behaviors, relative to those of other information providers, influence who the information seeker believes provides a valuable response and how valuable he or she judges the providers information to be. The authors track information queries, information provider responses, and objective valuation of these responses by information seekers in a Web forum, in which responses to information queries come from multiple information providers with whom the information seeker has not met face-to-face and has had no prior interaction. Among other results, the authors show that a providers response speed, the extent to which the providers previous responses within the focal domain have been positively evaluated by others, and the breadth of the providers previous responses across different domains of knowledge affect objective judgments of information value. Importantly, these effects are moderated by the information seekers goal orientation. The information providers experience in responding to questions in different domains of knowledge increases judgments of information value for information seekers with a decision-making orientation, whereas the information providers reputation for providing valuable contributions within the focal domain increases judgments of information value for information seekers with a learning orientation.

Temporal Contiguity and Negativity Bias in the Impact of Online Word of Mouth

Prior research shows that positive online reviews are less valued than negative reviews. The authors argue that this is due to differences in causal attributions for positive versus negative information such that positive reviews tend to be relatively more attributed to the reviewer (vs. product experience) than negative reviews. The presence of temporal contiguity cues, which indicate that review writing closely follows consumption, reduces the relative extent to which positive reviews are attributed to the reviewer and mitigates the negativity bias. An examination of 65,531 Yelp.com restaurant reviews shows that review value is negatively related to review valence but that this negative relationship is absent for reviews that contain temporal contiguity cues. A series of lab studies replicates these findings and suggests that temporal contiguity cues enhance the value of a positive review and increase the likelihood of choosing a product with a positive review by changing reader beliefs about the cause of the review.

Network Characteristics and the Value of Collaborative User-Generated Content

User-generated content is increasingly created through the collaborative efforts of multiple individuals. In this paper, we argue that the value of collaborative user-generated content is a function both of the direct efforts of its contributors and of its embeddedness in the content--contributor network that creates it. An analysis of Wikipedias WikiProject Medicine reveals a curvilinear relationship between the number of distinct contributors to user-generated content and viewership. A two-mode social network analysis demonstrates that the embeddedness of the content in the content--contributor network is positively related to viewership. Specifically, locally central content---characterized by greater intensity of work by contributors to multiple content sources---is associated with increased viewership. Globally central content---characterized by shorter paths to the other collaborative content in the overall network---also generates greater viewership. However, within these overall effects, there is considerable heterogeneity in how network characteristics relate to viewership. In addition, network effects are stronger for newer collaborative user-generated content. These findings have implications for fostering collaborative user-generated content.

Should Recommendation Agents Think Like People

Electronic recommendation agents have the potential to increase the level of service provided by firms operating in the online environment. Recommendation agents assist consumers in making product decisions by generating rank-ordered alternative lists based on consumer preferences. However, many of the online agents currently in use rank options in different ways than the consumers they are designed to help. Two experiments examine the role of similarity between an electronic agent and a consumer, in terms of actual similarity of attribute weights and perceived similarity of decision strategies, on the quality of consumer choices. Results indicate that it helps consumers to use a recommendation agent that thinks like them, either in terms of attribute weights or decision strategies. When agents are completely dissimilar, consumers may be no better, and sometimes worse off, using an agent’s ordered list than if they simply used a randomly ordered list of options.

Combating Obesity in the Courts: Will Lawsuits Against Mcdonald's Work?

A proposed method of combating obesity in the United States is to hold food companies legally liable for obesity-related damages. Recent lawsuits against fast-food restaurants, such as Pelman v. McDonalds Corp., have tried to draw on the success of tobacco litigation by claiming that fast-food marketers provide misleading information about the nutritional value of their products, leading consumers to overconsume and, thus, become obese. The Pelman plaintiffs also allege that fast food is addictive and have asked to represent a class of children who have become obese as a result of McDonalds products. This article compares legal efforts against the aggressive marketing of fast food with those against the marketing of tobacco products and argues that, for several reasons, such legal efforts will face substantial hurdles. In particular, this article argues that to be successful, such lawsuits must show either that McDonalds acted deceptively or that it has a duty to warn consumers about the unhealthful nature of its products. In addition, they must show that they satisfy the requirements necessary to certify a class. Finally, they must gain public and legislative support for legal action. Without these lawsuits satisfying the necessary legal elements and gaining increased public support for legal action against the industry, it seems unlikely that the fast-food industry will be held responsible for obesity-related damages. Having concluded that the tobacco litigation experience does not offer a promising road map to combat obesity, the authors briefly consider the vulnerability of the food industry to alternative legal strategies and legislative actions.

Measuring Decision Quality Using Recommendation Agents

In addition to helping consumers make better decisions, the use of electronic recommendation agents provides a way for marketers to gather information and assess the quality of consumer decisions. The use and type of agent employed determines the types of measures of decision quality that can be employed by online providers. We examine the assumptions of and relationships among preference-dependent, preference-independent, and subjective measures of decision quality. Analysis of data from a series of experiments that simulate a broad spectrum of recommendation agent approaches shows that preference-independent measures capture about 63% of the variance of preference-dependent measures and that subjective measures capture 9% of the variance of preference-dependent and preference-independent measures. In addition, a superior and parsimonious measure of decision quality can be obtained by selectively combining these measures. Managerial implications for deploying electronic recommendation agents are discussed.