Abstract

https://ssrn.com/abstract=2676699
 


 



The Uncertain Value of Uncertainty: When Consumers are Unwilling to Pay for What They Like


Alice Moon


Disney Research

Leif D. Nelson


University of California, Berkeley - Haas School of Business

October 19, 2015


Abstract:     
Understanding how much consumers value products is crucial for marketers. Though past research has assumed that pricing measures (e.g., willingness-to-pay) and rating measures (e.g., enjoyment) are interchangeable in determining value, across seven studies (N = 3919), we find that these measures are distinct under uncertainty. Namely, when considering pricing measures (e.g., willingness-to-pay), uncertainty is evaluated negatively, whereas when considering rating measures (e.g., enjoyment), uncertainty is evaluated positively. This effect holds whether the outcomes are positive or negative, and even when changing the amount of uncertainty, uncertainty remains negative with pricing measures and positive with rating measures. We empirically test some possible explanations and discuss crucial implications for both theory and applications.

Number of Pages in PDF File: 46

Keywords: Willingness-to-pay, Enjoyment, Uncertainty, Measurement

JEL Classification: M30, M31


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Date posted: October 27, 2015 ; Last revised: July 2, 2016

Suggested Citation

Moon, Alice and Nelson, Leif D., The Uncertain Value of Uncertainty: When Consumers are Unwilling to Pay for What They Like (October 19, 2015). Available at SSRN: https://ssrn.com/abstract=2676699 or http://dx.doi.org/10.2139/ssrn.2676699

Contact Information

Alice Moon (Contact Author)
Disney Research ( email )
4720 Forbes Avenue
LL
Pittsburgh, PA 15213
United States
Leif D. Nelson
University of California, Berkeley - Haas School of Business ( email )
545 Student Services Building, #1900
2220 Piedmont Avenue
Berkeley, CA 94720
United States

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