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The Discriminating Consumer: Product Proliferation and Willingness to Pay for Quality

Journal of Marketing Research, Vol. 49, No. 1, 2012

Posted: 21 Jan 2010 Last revised: 17 Aug 2012

Marco Bertini

ESADE Business School

Luc Wathieu

Georgetown University McDonough School of Business

Sheena S. Iyengar

Columbia Business School - Management Division

Date Written: August 16, 2012

Abstract

The authors propose that a crowded product space motivates consumers to better discriminate between choice 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 this inference in turn raises the importance of quality in decision-making.

Keywords: Product Proliferation, Consumer Inference, Price-Quality Trade-Offs, Willingness to Pay, Behavioral Eonomics

Suggested Citation

Bertini, Marco and Wathieu, Luc and Iyengar, Sheena S., The Discriminating Consumer: Product Proliferation and Willingness to Pay for Quality (August 16, 2012). Journal of Marketing Research, Vol. 49, No. 1, 2012. Available at SSRN: https://ssrn.com/abstract=1539623 or http://dx.doi.org/10.2139/ssrn.1539623

Marco Bertini (Contact Author)

ESADE Business School ( email )

Avinguda de la Torre Blanca, 59
Sant Cugat del Vall├Ęs, 08172
Spain

Luc Wathieu

Georgetown University McDonough School of Business ( email )

3700 O Street, NW
Washington, DC 20057
United States

Sheena S. Sethi-Iyengar

Columbia Business School - Management Division ( email )

3022 Broadway
New York, NY 10027
United States

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