It must be great; it rose through the ranks: Studying the effect of dynamic ranks on consumer judgments

• Main Authors: Tripathi, Sanjeev, Pandey, Arpita, Jain, Shailendra
• Format: Conference Proceeding
• Language: English
• Subjects: Communication; Consumer behavior; Entrepreneurship; Ratings & rankings
• ISSN: 0098-9258

Firm ranks are dynamic in nature. Across five studies, we show that consumers reward (vs. penalize) firms that move up (vs. down) these lists. This effect is stronger when the firm is viewed as mutable and is moderated by the current rank and magnitude of rank change of the firm. Ranked lists are ubiquitous and such lists are often updated with entities changing ranks. Past research indicates that consumers rely on the present rank of the firm to evaluate the status of a ranked entity. In this research, we demonstrate that consumer evaluations of a firm are based on a firm's current as well as past rank. Different predictions are possible on how rank change may impact consumer perception. However, the evidence from literature on reference-dependence and missing information-based inference-making support the direction of change proposition, i.e. the direction of rank change influences the evaluation. This research is one of the initial studies on dynamic ranks. The research provides suggestions on how firms can manage their communication about rank change to get more positive evaluations from consumers.