Brand Effects On Choice and Choice Set Formation Under Uncertainty

Swait, JRJD; Erdem, T

Brand Effects On Choice and Choice Set Formation Under Uncertainty

Swait, JRJD Erdem, T

Permalink

Publisher:: INFORMS
Publication Type:: Journal Article
Citation:: Marketing Science, 2007, 26 (5), pp. 679 - 697
Issue Date:: 2007-01

Closed Access

	Filename	Description	Size
	2010006502OK.pdf		9.5 MB	Adobe PDF	View/Open

Copyright Clearance Process

Recently Added
In Progress
Closed Access

This item is closed access and not available.

Full metadata record

Field	Value	Language
dc.contributor.author	Swait, JRJD	en_US
dc.contributor.author	Erdem, T	en_US
dc.date.issued	2007-01	en_US
dc.identifier.citation	Marketing Science, 2007, 26 (5), pp. 679 - 697	en_US
dc.identifier.issn	0732-2399	en_US
dc.identifier.uri	http://hdl.handle.net/10453/15770
dc.description.abstract	This paper examines the effects of brand credibility, a central concept in information economics-based approaches to brand effects and brand equity, on consumer choice and choice set formation. We investigate the mechanisms through which credibility effects materialize, namely, through perceived quality, perceived risk, and information costs saved. The credibility of a brand as a signal is defined as the believability of the product position information contained in a brand, which depends on consumer perceptions of the willingness and ability of firms to deliver what they have promised. The choice set is defined as the collection of brands that have a nonzero probability of being chosen among those actually available for choice in a given context. Furthermore, we study the impact of brand credibility on the variance of the stochastic component of utility. Not only do choice model parameters capture the impact of systematic utility differences on choice probabilities, but also the magnitude of this systematic impact is moderated by the relative importance of the stochastic utility component in preference. We term this moderation phenomenon preference discrimination, which we conceptualize as the decision makers' capacity to effectively discriminate between products' utilities in choice situations. We estimate a discrete choice model of brand choice set formation and preference discrimination on experimental data in two categories--juice and personal computers--and find strong evidence for brand credibility effects and differential mechanisms through which brand credibility's impact materializes on brand choice conditional on choice set, choice set formation, and preference discrimination	en_US
dc.publisher	INFORMS	en_US
dc.relation.ispartof	Marketing Science	en_US
dc.relation.isbasedon	10.1287/mksc.1060.0260	en_US
dc.subject.classification	Marketing	en_US
dc.title	Brand Effects On Choice and Choice Set Formation Under Uncertainty	en_US
dc.type	Journal Article
utslib.citation.volume	5	en_US
utslib.citation.volume	26	en_US
utslib.for	150504 Marketing Measurement	en_US
utslib.for	150503 Marketing Management (incl. Strategy and Customer Relations)	en_US
utslib.for	150506 Marketing Theory	en_US
utslib.for	1505 Marketing	en_US
pubs.embargo.period	Not known	en_US
pubs.organisational-group	/University of Technology Sydney
pubs.organisational-group	/University of Technology Sydney/Faculty of Business
pubs.organisational-group	/University of Technology Sydney/Strength - CENSOC - Study of Choice
utslib.copyright.status	closed_access
pubs.consider-herdc	false	en_US
pubs.issue	5	en_US
pubs.volume	26	en_US

Abstract:

This paper examines the effects of brand credibility, a central concept in information economics-based approaches to brand effects and brand equity, on consumer choice and choice set formation. We investigate the mechanisms through which credibility effects materialize, namely, through perceived quality, perceived risk, and information costs saved. The credibility of a brand as a signal is defined as the believability of the product position information contained in a brand, which depends on consumer perceptions of the willingness and ability of firms to deliver what they have promised. The choice set is defined as the collection of brands that have a nonzero probability of being chosen among those actually available for choice in a given context. Furthermore, we study the impact of brand credibility on the variance of the stochastic component of utility. Not only do choice model parameters capture the impact of systematic utility differences on choice probabilities, but also the magnitude of this systematic impact is moderated by the relative importance of the stochastic utility component in preference. We term this moderation phenomenon preference discrimination, which we conceptualize as the decision makers' capacity to effectively discriminate between products' utilities in choice situations. We estimate a discrete choice model of brand choice set formation and preference discrimination on experimental data in two categories--juice and personal computers--and find strong evidence for brand credibility effects and differential mechanisms through which brand credibility's impact materializes on brand choice conditional on choice set, choice set formation, and preference discrimination

Please use this identifier to cite or link to this item:

http://hdl.handle.net/10453/15770