Familiarity and Its Impact on Consumer Decision Biases and Heuristics

Abstract

The impact of familiarity on consumer decision biases and heuristics is examined. Subjects at three different familiarity levels revealed interesting differences in perceptual category breadth, usage of functional and nonfunctional product dimensions, decision time, and confidence. T wo major approaches are available for operationalizing and measuring product familiarity. One is to measure product familiarity in terms of how much a person knows about the product; the other is to measure familiarity in terms of how much a person thinks slhe knows about the product. According to the former, product familiarity may be examined with respect to the knowledge structure of an individual's long-term memory (LTM). According to the latter, product familiarity is based on the person's selfreport of how much s/he knows about the product (Lichtenstein and Fischhoff 1977). The former approach (amount of knowledge) contributes to understanding the impact of memory contents on the decision maker's evaluation and choice decisions; the latter (self-assessed familiarity) provides information about decision makers' (DM) systematic biases and heuristics in choice evaluations and decisions. The objective of the present study is to examine, in a descriptive framework, decision (evaluation) biases and heuristics of consumers at different levels of familiarity, with specific attention to the impact on such informationprocessing heuristics as (1) perceptual category breadth, (2) use of functional and nonfunctional product dimensions, (3) decision time, and (4) confidence in choice.