Are experts overoptimistic about the success of market labeling information?

Grace Melo, Marco Palma (), Laura Chomali and Luis Ribera

No 360812, 2025 AAEA & WAEA Joint Annual Meeting, July 27-29, 2025, Denver, CO from Agricultural and Applied Economics Association

Abstract: Being able to accurately predict the marketing effectiveness of product labels is critical for business profitability. Do industry experts (e.g., domain-specific and domain-general marketers) understand and accurately predict which messages appeal most to consumers? There is limited knowledge in this area, specifically around two essential food attributes: health and taste. Consumers perceive health and taste as trade-offs, which makes their reaction to such marketing information challenging to forecast. This study is the first to quantify the extent to which domain-general vs domain-specific experts can accurately predict consumer responses to health and taste information via marketing labels. We conducted three incentivized studies: Study 1 investigated consumer preferences for simple health versus taste labeling messages with actual consumers. Study 2 uncovered industry domain-specific ‘industry experts’ predictions for average consumers’ willingness-to-pay (WTP) for the messages providing incentives for accuracy. Study 3 employs domain-general ‘marketing experts’ (cross-industry) and evaluates the role of market intelligence in improving consumer valuation forecasts. We found that while both expert types made optimistic predictions that marketing health-related information would effectively increase consumer valuations, consumers did not respond to such information. Moreover, despite exhibiting greater confidence in their predictions than domain-general experts (63% vs 70%), domain-specific industry experts overestimated consumer valuations by 33% relative to the average consumer WTP of $6.80 for an 8 oz. bag of pecans. In contrast, domain-general experts overestimated consumer valuations by only 5%, suggesting possible motivated reasoning among industry-specific experts. Releasing market intelligence to domain-general experts for the baseline valuation (control) improved the accuracy of the forecast for the control, but forecasting inaccuracies for specific labeling messages prevailed.

Keywords: Institutional; and; Behavioral; Economics (search for similar items in EconPapers)
Pages: 70
Date: 2025
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Persistent link: https://EconPapers.repec.org/RePEc:ags:aaea25:360812

DOI: 10.22004/ag.econ.360812

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