Cognitive Dissonance, Confirmatory Bias and Inadequate Information Processing: Evidence from Experimental Auctions

Cao, Ying, David R. Just, Calum G. Turvey, and Brian Wansink (2015), “Existing Food Habits and Recent Choices Lead to Disregard of Food Safety Announcements,” Canadian Journal of Agricultural Economics, 63, 491-511.

Posted: 4 Sep 2015 Last revised: 28 Apr 2017

See all articles by Jessica (Ying) Cao

Jessica (Ying) Cao

University of Guelph

David Just

Cornell University - Dyson School of Applied Economics and Management

Calum G. Turvey

Cornell University - School of Applied Economics and Management

Brian Wansink

Retired

Date Written: September 2, 2015

Abstract

On whom do food safety announcements have the least impact? Building on research on cognitive dissonance and confirmatory bias, this study shows that consumers tend to inadequately process (food safety) information, pay limited attention to signals, and make purchase decisions that are biased towards their initial choices. Using an incentive compatible auction mechanism, this study elicited consumers' willingness to pay (WTP) under different informational settings. Results showed that consumers were willing to pay much higher prices when they chose to commit to food items (treatment) than when they were randomly assigned (control), suggesting cognitive dissonance. The gaps in WTP were further enlarged as food safety information was revealed to consumers. Confirmatory bias was supported by findings that those who made an earlier commitment were more reluctant to change their WTPs despite increased risk perceptions. In terms of market responses, demand curves were less likely to shift down in the presence of food safety risks because consumers were less responsive to public information due to their existing habits and psychological biases. Specialized targeted strategies will be necessary to target those who are heavy or recent users of the target food when there is a food safety scare.

Keywords: Cognitive Dissonance, Confirmatory Bias, Risk Perception, Self-Justification

JEL Classification: D03, D12, D44

Suggested Citation

Cao, Jessica (Ying) and Just, David and Turvey, Calum G. and Wansink, Brian, Cognitive Dissonance, Confirmatory Bias and Inadequate Information Processing: Evidence from Experimental Auctions (September 2, 2015). Cao, Ying, David R. Just, Calum G. Turvey, and Brian Wansink (2015), “Existing Food Habits and Recent Choices Lead to Disregard of Food Safety Announcements,” Canadian Journal of Agricultural Economics, 63, 491-511., Available at SSRN: https://ssrn.com/abstract=2654811

Jessica (Ying) Cao

University of Guelph ( email )

50 Stone Rd. E.
Dept. of FARE
Guelph, Ontario N1G2W1
Canada
1-519-824-4120 x.58274 (Phone)
1-519-767-1510 (Fax)

HOME PAGE: http://www.uoguelph.ca/fare/users/ycao01

David Just

Cornell University - Dyson School of Applied Economics and Management ( email )

Ithaca, NY
United States
6072552086 (Phone)

Calum G. Turvey

Cornell University - School of Applied Economics and Management ( email )

248 Warren Hall
Ithaca, NY 14853
United States

Brian Wansink (Contact Author)

Retired ( email )

607-319-0123 (Phone)

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