Consumer Uncertainty and Purchase Decision Reversals: Theory and Evidence

This research examines how prepurchase information that reduces consumer uncertainty about a product or service can affect consumer decisions to reverse an initial product purchase or service enrollment decision. One belief commonly held by retailers is that provision of greater amounts of informati...

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Bibliographic Details
Published in:Marketing science (Providence, R.I.) R.I.), 2015-07, Vol.34 (4), p.590-605
Main Authors: Shulman, Jeffrey D., Cunha, Marcus, Clair, Julian K. Saint
Format: Article
Language:English
Subjects:
Analysis
Behavioral decision theory
Consumer behavior
Consumer behaviour
Consumer preferences
Decision making models
decision reversal
Decision-making
Econometrics
Information processing
Marketing management
product returns
reference-dependence
Returns (Retail trade)
service cancellations
Special Section: Marketing Science in Emerging Markets
Studies
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Summary:This research examines how prepurchase information that reduces consumer uncertainty about a product or service can affect consumer decisions to reverse an initial product purchase or service enrollment decision. One belief commonly held by retailers is that provision of greater amounts of information before the purchase reduces decision reversals. We provide theory and evidence showing conditions under which uncertainty-reducing information provided before the purchase decision can actually increase the number of decision reversals. Predictions generated from an analytical model of consumer behavior incorporating behavioral theory of reference-dependence are complemented by empirical evidence from both a controlled behavioral experiment and econometric analysis of archival data. Combined, the theory and evidence suggest that managers should be aware that their information provision decisions taken to reduce decision reversals may actually increase them. Data, as supplemental material, are available at http://dx.doi.org/10.1287/mksc.2015.0906 .
ISSN:0732-2399
1526-548X
DOI:10.1287/mksc.2015.0906