EconPapers    
Economics at your fingertips  
 

Consumer Choices Under Small Probabilities: Overweighting or Underweighting?

Rong Chen () and Jianmin Jia ()

Marketing Letters, 2005, vol. 16, issue 1, 5-18

Abstract: This article provides a theoretical account and identifies boundary conditions for the common beliefs about the “overweighting of small probabilities”. Based on four studies, our results suggest that the weighting of probabilities is context-dependent. When the contrast in value is reduced or not presented in a decision problem, small probabilities are less likely to be overweighted. In addition, as the associated payoffs increase, the weights on small probabilities tend to diminish or even to be “underweighted”. However, there is an “interpersonal difference” in the weighting of probabilities which reflects the particular circumstances of individuals, including their wealth status. Some implications of small probabilities for marketing practices are also investigated and discussed. Copyright Springer Science + Business Media, Inc. 2005

Keywords: small probability; overweighting; consumer choice (search for similar items in EconPapers)
Date: 2005
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (3) Track citations by RSS feed

Downloads: (external link)
http://hdl.handle.net/10.1007/s11002-005-1137-7 (text/html)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:kap:mktlet:v:16:y:2005:i:1:p:5-18

Ordering information: This journal article can be ordered from
http://www.springer. ... etailsPage=societies

DOI: 10.1007/s11002-005-1137-7

Access Statistics for this article

Marketing Letters is currently edited by Joel Steckel and Peter Golder

More articles in Marketing Letters from Springer
Bibliographic data for series maintained by Sonal Shukla () and Springer Nature Abstracting and Indexing ().

 
Page updated 2024-02-18
Handle: RePEc:kap:mktlet:v:16:y:2005:i:1:p:5-18