Erroneous consumer evaluations in the marketplace: How consumer evaluations are biased by raw performance scores

Abstract

AbstractA consumer's evaluation of an entity in the marketplace, such as a product or service provider, is one of the most important factors in determining whether or not they consume it. Indeed, the relationship between perceived quality and likelihood of purchase is a central finding in marketing. Oftentimes, consumers make these evaluations after learning information regarding the entity's performance according to some metric (i.e., its “raw score”) and how the entity's performance compares to the performances of other entities (i.e., its accompanying percentile). In these cases, consumers should discount the raw score and exclusively use the percentile, to adjust for differences in the “friendliness” of the metric. In the present work, we demonstrate that consumers fail to evaluate entities in this way, incorporating raw scores into their assessments when they should not. We also show that this effect is the result of an anchoring and insufficient adjustment process. Consumers anchor on the notion that a good (vs. bad) raw score equates to a favorable (vs. unfavorable) performance and fail to adjust from this anchor when considering the percentile information about how the entity's raw score fits into the greater distribution. Moreover, we demonstrate that how a consumer evaluates an entity, indeed, influences their likelihood of consuming it, highlighting the marketing implications of this phenomenon. We conclude by discussing how this work adds to the literatures on consumer psychology, anchoring and adjustment, biases, judgment, and processing.