The Risk of Misinforming for Competing Messages

Abstract

Introduction This paper is an extension of previous findings presented in Christozov, Chukova, and Mateev (2006, 2007, 2008). We consider the marketplace as place where messages, describing different products suitable for solving one and the same set of clients' problems, are competing. earlier studies, mentioned above, address the risk of misinforming in the case of single message distributed to group of potential clients and its effect on their purchase decision. Here, these models are extended to allow evaluation of the risk for multiple competing offers. misinforming is due to the existence of between the two parties--the sender and receiver. This is actually two-fold, because the sender knows very well the meaning of the s/he is providing, but his/her knowledge regarding the receiver's objectives on the use of this is limited. From this viewpoint an assessment of the risk of mis informing provides learning opportunity to both parties and offers some ideas on how to improve the informing process. phenomenon of between two parties occurs when one of the parties has better understanding and is better informed on the subject of communication than the other one. There are several aspects of that have attracted the interest of researchers. concept of imbalance originates in Arrow (1963/2001). His ideas were further developed by Akerlof (1970) in his paper The Market for 'Lemon's, where the term information asymmetry was firstly introduced. Akerlof investigated the influence of asymmetric on the market value of commodity and his ideas initiated studies on the impact and usage of the to improve the influence in business relationships. Slovac (1993) studied the asymmetric impact of negative and positive on the social trust, known as principle of Information Asymmetry or Trust Asymmetry. White and Eiser (2005) continue this line of research. role of as source of misinterpretation, which results in misinforming and/or misleading in sales/purchase process and might lead to wrong purchase decisions has never been studied at the level it deserves. Some authors (Hseih, Lai, & Shi, 2006) consider the impact of on the in business transactions, but they do not go beyond recommendations on how to improve the process. Christozov, Chukova, and Mateev (2006, 2007, 2008) developed model to quantify the risk of misinforming, caused by and the current paper extends this study. outline of this paper is as follows. next section summarizes the background of the problem. following two sections describe the notations and provide summary of the models studied earlier and present the new model for two competing messages. This model is then generalized to the case of n competing messages. final section consists of conclusions and future research directions. Background A Successful Informing Process Definition 1: We consider a in an informing process in several levels, where the higher level success implies success in all lower levels: Level 1: An informing process is successful if the message created by the sender is successfully transmitted to the receiver. Level 2: process is successful, if the receiver is able to read and understand the transmitted message. Level 3: process is successful, if the receiver does not ignore the included in the message, but rather accepts and adopts the encoded in it, i.e., the receiver acquires new knowledge. Level 4: process is successful, if the acquired knowledge coincides with the the sender intended to provide to the receiver. Also this level of implies that the objectives of the receiver in acquiring this meet the intention (purpose) of the sender in providing it. …