The discriminating consumer: Product proliferation and willingness to pay for quality
Journal
Journal of Marketing Research
Subject
Marketing
Publishing details
Publication Year
2012
Abstract
The authors propose that a crowded product space motivates consumers to better discriminate between options of different quality. Specifically, this article reports evidence from three controlled experiments and one natural experiment that people are prepared to pay more for high-quality products and less for low-quality products when they are considered in the context of a dense, as opposed to a sparse, set of alternatives. To explain this effect, the authors argue that consumers uncertain about the importance of quality learn from observing market outcomes. Product proliferation reveals that other consumers care to discriminate among similar alternatives, and in turn, this inference raises the importance of quality in decision making.
Keywords
Product proliferation; Assortment size; Vertical diferentiation; Willingness to pay; Consumer inference
Available on ECCH
No
