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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 [...]

An implicit assumption from prior research is made explicit to clarify the conditions for which information that can reduce uncertainty about a purchase can increase the likelihood the purchase is cancelled or returned. Prior research found that providing uncertainty-reducing information can increase product returns or service cancellations when judgments are reference-dependent and losses loom larger than gains. This paper revisits the analytical proof to demonstrate that the results hold when an implicit assumption is made explicit. History: Olivier Toubia served as the senior editor for this article. [ABSTRACT FROM AUTHOR]

Companies often extend product lines with the goal of increasing demand for their products and responding to competitive threats. Although line extensions may lead to cannibalization and reduction of overall profit, the bulk of theoretical and empirical research has suggested that product line extensions result in a net gain of overall demand and market share. To mitigate cannibalization, the extant literature prescribes the addition of premium versions of products, or "upward line extensions," with the intention of achieving gains not only in demand and market share but also in overall profit. In this research, the authors employ analytical and empirical methods to make the case that upward line extensions aimed at matching a competing product's attribute may lead consumers to reassess their perceptions about the brand and the attributes of products in the market in a way that erodes the advantages of the extending firm. Ultimately, this can result in a loss of demand, market share, and profit for the extending firm. [ABSTRACT FROM AUTHOR]

New brands often partner with well-known brands under the assumption that they will benefit from the awareness and positive associations that well-known brands yield. However, this associations-transfer explanation may not predict co-branding results when the expected benefits of the co-branded product are presented simultaneously with the co-branding information. In this case, the results of co-branding instead follow the predictions of adaptive-learning theory which posits that consumers may differentially associate each brand with the outcome as a result of cue interaction effects. Three experiments show that the presence of a well-known brand can weaken or strengthen the association between the less-known brand and the co-branding outcome depending on the timing of the presentation of product benefit information. When this information was presented simultaneously with co-branding information (at a delay after co-branding information), the presence of a well-known brand weakened (strengthened) the association of the less-known brand with the outcome and thereby lowered (improved) evaluation of the less-known brand. [ABSTRACT FROM AUTHOR]

How are price judgments influenced by the distribution of observed prices for other items in the same category? Processing goals will moderate price-judgment processes. When the processing goal is discrimination, price perceptions will be influenced by variations in range and ranks of prices in a distribution and contrast effects will be observed. For example, lowering the price of the lowest-priced product in a set will increase perceived expensiveness of higher-priced products. When the processing goal is generalization, however, price perceptions will be influenced by variations in the mean of the price distribution, in which case assimilation is observed. For example, lowering the price of the lowest-priced product in a set will decrease perceived expensiveness of higher-priced products. This latter finding Is in sharp contrast to findings in the current literature on the effect of price structure on price judgments. [ABSTRACT FROM AUTHOR]