Existing Food Habits and Recent Choices Lead to Disregard of Food Safety Announcements

Abstract

On whom do food safety announcements have the least impact? Building on research on cognitive dissonance and confirmatory bias, this study shows that consumers tend to inadequately process (food safety) information, pay limited attention to signals, and make purchase decisions that are biased toward their initial choices. Using an incentive compatible auction mechanism, this study elicited consumers' willingness to pay (WTP) under different informational settings. Results showed that consumers were willing to pay much higher prices when they chose to commit to food items (treatment) than when they were randomly assigned (control), suggesting cognitive dissonance. The gaps in WTP were further enlarged as food safety information was revealed to consumers. Confirmatory bias was supported by findings that those who made an earlier commitment were more reluctant to change their WTPs despite increased risk perceptions. In terms of market responses, demand curves were less likely to shift down in the presence of food safety risks because consumers were less responsive to public information due to their existing habits and psychological biases. Specialized targeted strategies will be necessary to target those who are heavy or recent users of the target food when there is a food safety scare.