The Discriminating Consumer: Product Proliferation and Willingness to Pay for Quality
The authors propose that a crowded product space motivates consumers to better discriminate between 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 in turn, this inference raises the importance of quality in decision making.
Bertini, Marco, Luc Wathieu, and Sheena Iyengar. "The Discriminating Consumer: Product Proliferation and Willingness to Pay for Quality." Journal of Marketing Research 49 (January 2012): 39-49.
Each author name for a Columbia Business School faculty member is linked to a faculty research page, which lists additional publications by that faculty member.
Each topic is linked to an index of publications on that topic.