Designed Uncertainty in Mystery Products

Alaa Elgayar, Daniel Guhl, Lucas Stich and Martin Spann
Additional contact information
Alaa Elgayar: HU Berlin
Daniel Guhl: HU Berlin
Lucas Stich: University of Würzburg
Martin Spann: LMU Munich

No 565, Rationality and Competition Discussion Paper Series from CRC TRR 190 Rationality and Competition

Abstract: Mystery products deliberately hide key attributes until after purchase and have become a common strategy in retail and services, yet systematic evidence on how to design them effectively remains limited. This research studies two managerial levers---outcome-set composition and uncertainty framing (risk vs. ambiguity)---in two incentive-aligned choice experiments: an induced-value lab study with vertically differentiated outcomes and a large-scale choice-based conjoint on apparel with horizontally differentiated brands. Willingness-to-pay is shaped primarily by the structure of the outcome set: when a dominant outcome is included, consumers discount the mystery product; when outcomes are similar in value, a premium can emerge. Ambiguity reduces valuation primarily when outcome differentiation is high, and it shifts attention away from brand and ``mystery'' cues toward tangible attributes such as fit and color. In market simulations, mystery products are more price-elastic than fully specified alternatives and shift profits toward participating brands, especially weaker ones, while non-participants lose. Overall, the results inform when and how designed uncertainty can be used as a marketing instrument.

Keywords: mystery products; choice-based conjoint; hierarchical bayes; market simulation; price competition (search for similar items in EconPapers)
JEL-codes: C25 D12 D81 (search for similar items in EconPapers)
Date: 2026-02-14
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