Consumer Uncertainty and Purchase Decision Reversals: Theory and Evidence

Jeffrey D. Shulman (), Marcus Cunha () and Julian K. Saint Clair ()
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Jeffrey D. Shulman: Michael G. Foster School of Business, University of Washington, Seattle, Washington 98195
Marcus Cunha: Terry College of Business, University of Georgia, Athens, Georgia 30602
Julian K. Saint Clair: College of Business Administration, Loyola Marymount University, Los Angeles, California 90045

Marketing Science, 2015, vol. 34, issue 4, 590-605

Abstract: 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 belief commonly held by retailers is that provision of greater amounts of information before the purchase reduces decision reversals. We provide theory and evidence showing conditions under which uncertainty-reducing information provided before the purchase decision can actually increase the number of decision reversals. Predictions generated from an analytical model of consumer behavior incorporating behavioral theory of reference-dependence are complemented by empirical evidence from both a controlled behavioral experiment and econometric analysis of archival data. Combined, the theory and evidence suggest that managers should be aware that their information provision decisions taken to reduce decision reversals may actually increase them.Data, as supplemental material, are available at http://dx.doi.org/10.1287/mksc.2015.0906 .

Keywords: decision reversal; product returns; service cancellations; reference-dependence (search for similar items in EconPapers)
Date: 2015
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Citations: View citations in EconPapers (17)

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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormksc:v:34:y:2015:i:4:p:590-605

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