Consumer Uncertainty Research Articles

The Impact of Augmented Reality for Displaying Virtual 3d Models of Products in Real Environments on Improvement of the Consumer Experience in Buying Industrial Designed Products

The purpose of this paper is to explore the possibilities for implementation of the augmented reality (АR) in the sales. The augmented reality contributes to enhansing and improving the consumer experience through the virtual display of 3D models of products in realistic environments. In this paper is presented an overview of the consumer behavior in online shopping and their uncertainties in the process. The online shopping offers more satisfaction to the modern consumers looking for comfort and speed. On the other hand, some consumers still feel uncomfortable to shop online. What prevents them from buying online is the inability to realistically check the products, to examine their different variants, and to show them to their friends from which they will get comments and opinions before the purchase.
 In this thesis are examined the possibilities for implementation of augmented reality technology in online stores, as well as the possibilities for management of the product configurations in AR – options for choosing different materials and colors of the product, that will allow the customers to adjust the product to their needs. The aim is to find methods and techniques that would alleviate the disadvantages as result of the lack of physical contact with the products during online sales, that would reduce the consumer uncertainty and increase the likelihood of successful choice and increased online sales.

WPI and Cellulose Nanofibres Bio-nanocomposites: Effect of Thyme Essential Oil on the Morphological, Mechanical, Barrier and Optical Properties

The uncertainty of consumers about the toxicological effects of synthetic antioxidants incorporated into the packaging has led to a demand for natural substituents that exhibit antioxidant activity without adding risk to the consumers. In this context, the effects of adding different concentrations of thyme essential oil (TEO) (20, 30, and 40% w/w) to whey protein isolate (WPI) and cellulose nanofibre (CNF) bio-nanocomposites developed by casting were studied. Scanning electron microscopy showed a reduction in the dispersion of CNF's in all films with the addition of TEO. The addition of TEO also decreased the water vapor permeability, increased the glass transition temperature, and crystallinity index. For the mechanical properties, the addition of TEO produced less rigid and elastic films with decreased in tensile strength, elongation at break, puncture strength, puncture deformation, and elastic modulus. In addition, the mechanical properties showed the formation of non-interactive systems and the FTIR spectra showed maintenance of the phenolic compounds of the TEO after the synthesis of the films. The optical properties showed that films were less yellow (b*) with a tendency to green (a*), less saturated (c*), and less transparent when compared with the control (0% TEO). The addition of TEO to bio-nanocomposites of WPI and CNFs, in the concentration range tested, enabled the formation of materials with properties that encourage the studies for various applications.

Retailer’s return policy in the presence of P2P secondary market

Abstract Consumer uncertainty is a non-negligible factor in the e-commerce era. Besides traditional return channels, the peer-to-peer (P2P) secondary platform gradually becomes another way to dispose of inappropriate products. In this paper, to study retailer’s return policy and its influence, we set a two-period model where a retailer sells new products in the first period and a P2P platform operates a web-based used-goods market in the second period. Our analysis shows that return permission causes increase in retail price and platform commission but not necessarily stimulate sales. The unit procuring cost affects sales and profits and we divide it into three cases: When the unit cost is sufficiently high, allowing returns always makes retailers and P2P platforms better off. When it is sufficiently low, returns make both incur loss. When it is medium, maintaining the return rate at a relatively low level generates a greater benefit to all stakeholders.

An agent-based model to simulate technology adoption quantifying behavioural uncertainty of consumers

A good estimation of consumers’ expected response to specific policy measures is of paramount importance in the design of effective schemes for the adoption of new technologies. The decision-making process of consumers is influenced by a multitude of factors. In this context, agent-based modeling techniques provide an appropriate framework to model such private adoption decisions. However, the models currently in use often fail to capture uncertainties related to agency and their ability to replicate reality. In order to address this drawback, we developed an agent-based technology adoption model that is supported by a complete framework for parameter estimation and uncertainty quantification based on historical data and observations. The novelty of our model lies in obtaining realistic uncertainty bounds and splitting the total model output uncertainty in its major contributing uncertainty sources. In this article, we demonstrated its applicability by exploring the evolution of the market share of small-scale PV systems in Greece, under two support schemes of interest. Our results indicated that, over 2018–2025, the net-metering scheme, currently operational, seems more effective than a proposed self-consumption scheme that subsidizes residential storage by 25%; however, the former scheme’s effectiveness is mainly related to the retail price of electricity. They also highlighted that storage investment costs need to follow a steep learning curve of at least a 10% annual reduction until 2025, for self-consumption to become attractive to consumers in Greece. Nevertheless, simulations showed that none of these two schemes can be as efficient as the previous feed-in-tariffs scheme.

PERLINDUNGAN HUKUM ATAS DATA PRIBADI BAGI KONSUMEN DALAM KLAUSULA EKSONERASI TRANSPORTASI ONLINE

The exoneration clause is still used in the online transportation agreement clause, when the user registers. This has an impact on the legal uncertainty for consumers in the protection of their personal data managed by the application business actors. This study aims to analyze the presence or absence of violations in Article 18 of the Consumer Protection Law related to exoneration clauses in online transportation, and forms of legal protection of consumer personal data in standard contracts. This research is a normative legal research, with a statue approach and comparative approach. The results of this study are that application business actors have transferred the responsibility of protecting consumer personal data which should be the obligation of the application business actor. The application of exoneration clauses carried out by application businesses is very detrimental to consumers by feeling insecure and comfortable in using online transportation services. Forms of legal protection from the government related to consumer personal data in using online transportation services with the obligation of businesses to revise and replace losses suffered by consumers.

The Impact of Framing on Acceptance of Cultured Meat.

Cultured meat can be produced from growing animal cells in-vitro rather than as part of a living animal. This technology has the potential to address several of the major ethical, environmental, and public health concerns associated with conventional meat production. However, research has highlighted some consumer uncertainty regarding the concept. Although several studies have examined the media coverage of this new food technology, research linking different frames to differences in consumer attitudes is lacking. In an experimental study, we expose U.S. adults (n = 480) to one of three different frames on cultured meat: “societal benefits,” “high tech,” and “same meat.” We demonstrate that those who encounter cultured meat through the “high tech” frame have significantly more negative attitudes toward the concept, and are significantly less likely to consume it. Worryingly, this has been a very dominant frame in early media coverage of cultured meat. Whilst this is arguably inevitable, since its technologically advanced nature is what makes it newsworthy, we argue that this high tech framing may be causing consumers to develop more negative attitudes toward cultured meat than they otherwise might. Implications for producers and researchers are discussed.

Multilateral agreement contract optimization of renewable energy power grid-connecting under uncertain supply and market demand

Renewable energy electricity is being developed and utilized on a large scale in many countries because of the fossil fuel pollution and the energy shortage. But the uncertainty of renewable energy output caused by intermittency, as well as the uncertainty of consumers’ electricity demand both bring difficulty to the grid-connection even with government support. There are interest conflicts between the power producer and grid company under the government’s fixed-pricing mechanism in renewable energy market. Therefore, this paper takes uncertainties of output and demand as well as the government subsidy into consideration, and then solves the problems of power grid-connection by designing a revenue-sharing contract between upstream and downstream enterprises. In this supply chain model which consists of one type of upstream firms, power generators, and a single dominant downstream grid company, the government plays a third-party role and subsidizes all the firms based on the grid-connected quantity. Consequently, the theoretical research and numerical simulation show that the revenue-sharing contract can realize the collaboration of renewable energy supply chain effectively with different market demand price elasticity. The profits of all supply chain members and the sales price both decrease with the growth of price elasticity in a lower range. Meanwhile, renewable energy power investment is hindered dramatically by a higher price elasticity. The results figure that the revenue-sharing contract is mainly influenced by the grid-connected wholesale price, the output intensity of renewable energy and the government subsidy. Specially, the revenue-sharing ratio of grid will exceed 80% when the renewable power generators receives all the government subsidies. This study provides an alternative approach for the renewable energy grid-connection and the power supply chain collaboration.

Uncertainty kills the long tail: demand concentration in peer-to-peer marketplaces

Theory on the “Long tail effect” predicts that consumer demand in online markets spreads over a long tail of niche products. Recent research, however, provides opposing evidence and questions the theory’s validity. In this paper, I aim to reconcile these opposing findings by proposing that consumer uncertainty represents a hidden yet important boundary condition for the long tail effect. Under high uncertainty, demand will be much more concentrated as consumers disproportionally choose the most reputable producers and products. I develop these arguments to predict the demand concentration in peer-to-peer marketplaces, a context in which consumers face high uncertainties about their transaction partners. Testing my predictions with a self-collected dataset of 862,755 transactions on a peer-to-peer marketplace for skillsharing supports my hypotheses. I find that a small share of producers disproportionately benefits from marketplace participation. During the observation period, twenty percent of producers generated 94% of sales. These findings suggest that an opposing rich-get-richer effect overrides the long tail effect in peer-to-peer marketplaces and other uncertain environments. I discuss how these findings inform research on peer-to-peer marketplaces and the sharing economy more broadly.

Why do consumers research their ancestry? Do self-uncertainty and the need for closure influence consumer's involvement in ancestral products?

This article examines why consumers choose to research their ancestry using commercial available products. Prior research suggests this is a voyage of personal discovery. We take this voyage and review consumer interest in ancestral products (e.g., DNA services) that is driven by a consumer's uncertainty about their sense of self. Focusing on uncertainty-identity theory, the findings from a study with a sample of adult Australian consumers show that people who want to reduce uncertainty about their sense of self respond favourably to a genealogical product that offers insight into a person's ancestry. Finding support the proposition that the need for closure moderates this effect. Consumers who are high in need for closure respond to self-uncertainty through an interest in commercial genealogical products. The study results show that curiosity underlies the effects in several ways; the desire to gain new knowledge about self, a curiosity to understand the past and the desire to reduce self-uncertainty about the past. Research implications for the study of consumer self-identity and uncertainty are presented, how consumers respond to this through the use of genealogical products examined. Managerial implications for the marketing of genealogical products are discussed, and recommendations for future research made.

Paying Before or Paying After? Timing and Uncertainty in Pay-What-You-Want Pricing

Pay what you want (PWYW) is a relatively new and promising pricing mechanism, where consumers have full control over the price they pay. It can potentially increase profits, but its practical applications have produced mixed results. The time of payment, and its implications for consumer uncertainty, might constitute an important determinant of the profitability of such pricing schemes for service providers. A large field experiment conducted in conventional and fast-food restaurants provides initial support that paying after consumption increases PWYW amounts. A laboratory study then details the underlying psychological process; payments after consumption help resolve uncertainty about the service process and service outcome. Another study affirms these insights and further shows that PWYW after consumption, compared with fixed pricing, can increase profitability due to enhanced service capacity utilization. By detailing how timing and uncertainty reduction affect consumers’ chosen payments, this article contributes to PWYW research in particular, as well as more general literature pertaining to the dynamics that affect consumers’ service experiences and service pricing studies.

Trade barriers or trade facilitators? The heterogeneous impact of food standards in international trade

AbstractRecent research shows that the effect of food standards can be heterogeneous across sectors or countries: they sometimes act as barriers to trade, but in other cases may lead to increased trade. I present empirical evidence on Norwegian seafood exports showing that foreign food standards, measured by sanitary and phytosanitary notifications to the WTO, generally have a negative impact on total exports, the number of exporters and their average exports. However, for fresh seafood, there is a positive counteracting effect. I present a theoretical explanation for this, suggesting that food standards reduce consumer uncertainty about quality and safety and therefore increase demand.

CURRENT TRENDS OF FINANCIAL TECHNOLOGY DEVELOPMENT

The paper considers the theoretical principles and applied principles concerning financial technologies. Currently, the rapid development of the digital economy has become an important global trend of dynamic socio-economic development, which has led to the spread of financial technology impacts on the entire system and structure of socio-economic relations. It is stated that as FinTech develops, the younger generation is now gaining more access to a wider variety of sophisticated financial products and services, some of which carry higher risks that are not yet known in the market. However, the financial knowledge of the younger generation is generally lower than their parents, as the Organization for Economic Co-operation and Development (OECD) notes. Studies have shown that the trend in the financial sector towards increasing automation, mobility and digitalization of financial services is changing. Blockchain, machine learning, AI and robotics are all creating huge waves in fintech, bringing both synergies and disruption to industry. However, as a result of the implementation of the PSD2 directive, the data that banks need to share is essentially sensitive financial data, and this naturally raises many privacy and security issues along with consumer uncertainty. Considering the international trends in the development of fintech companies, Ukrainian banks are interested in creating joint projects with domestic and foreign fintech representatives. As fintech companies become more mature and technology-oriented, they are faced with the need to invest more in sophisticated software, supported by advanced analytics and personalized marketing campaigns. This brings fintech to a more consumer-oriented state where service providers are driven by the ongoing challenges of society and the need to meet their customers' needs. The major client for most fintech companies is business, both large corporate and SMB (37% for each). 21% of companies operate in the mass retail market, and only 6% target the premium retail segment. Keywords: financial technologies, digitization, blockchain, artificial intelligence, neo-bank, crowdfunding, insurtech, open banking.

An economic analysis of nanofood labeling

The paper examines the economic effects of labeling food nanotechnology products using an analytical framework of heterogeneous consumers and imperfectly competitive suppliers. Labeling results in increased costs for nanofood producers (the cost effect of the labeling policy), reduced consumer uncertainty regarding the nature of the food product (certainty effect), and can affect consumer attitudes towards nanofoods by being perceived as a warning signal (stigma effect). In this context, nanofood labeling can change the perceived quality differences between nanofoods and their conventional and organic counterparts, with such changes being more salient when the stigma effect is large, when consumers have low awareness of food nanotechnology in the absence of labeling, and/or when competition among nanofood suppliers is more intense. Despite its empirical relevance, the impact of a labeling policy on consumer preferences (and the economic ramifications of such impact) has largely been ignored by the theoretical literature on the economics of labels. Our analysis shows that it matters. Specifically, our study shows that the market and welfare effects of labeling are case-specific and dependent on consumer awareness of, and attitudes towards food nanotechnology before and after the introduction of the policy as well as the relative magnitude of the cost, certainty and stigma effects of nanofood labeling. Our analytical findings also suggest that the effects of nanofood labels on consumer welfare are asymmetric with certain groups of consumers benefiting even when labeling has a stigma effect on nanofoods.

Optimal sequential releasing strategy for software products in the presence of word-of-mouth and requirements uncertainty

This study proposes a two-period analytical model to explore the relative optimality of three sequential releasing strategies for a software vendor: (1) Skipping Strategy—skip the limited-functionality version and introduce a full-functionality version in the next period, (2) Replacement Strategy—release a limited-functionality version first and replace it with a full-functionality version later, and (3) Line-extension Strategy—release a limited-functionality version first and extend the product line by releasing a full-functionality version later. Word-of-mouth (WOM) effect and uncertainty in consumers’ requirements are taken into consideration. Our analysis shows that Skipping Strategy is optimal when the net WOM is negative and sufficiently small, while the Replacement Strategy becomes the optimal choice when the net WOM is negative but not sufficiently small. However, the Line-extension Strategy dominates other two strategies when the net WOM is positive. Different pricing patterns may be chosen when adopting Line-extension Strategy, i.e. when the net WOM is positive and not very large, Low–High pricing pattern (a relatively low price for the limited-functionality version and a relatively high price for the full-functionality version) is optimal, while High–Low pricing pattern (a relatively high price for the limited-functionality version and a relatively low price for the full-functionality version) becomes optimal when the net WOM is positive and sufficiently large. Numerical experiments show that the software vendor could improve its profit by choosing optimal quality design but the overall dominance pattern of the three release strategies is similar no matter whether the quality design is exogenously given or optimally chosen.

Leveraging Consumer Uncertainty in Pricing E-Retail Subscriptions

Leveraging Consumer Uncertainty in Pricing E-Retail Subscriptions

Uncertainty of Food Safety in South Korea: An Analysis of the Imported Food Items from China

We develop the model predicting consumer uncertainty about the imported food safety through the technological and behavioral lenses. The paper draws...

Retail Distribution Strategy with Outlet Stores

Traditionally, outlet stores were situated away from main stores in order to provide older, less desirable products at discounted prices. More recently, some firms have featured an outlet-within-a-store concept and offer consumers the experience of outlet shopping at the same location. With an interest in examining the effect of location differentiation on a firm’s distribution strategy, we model a firm with an existing main store and study its motivation on whether or not to open an outlet store, and where to locate it. When consumers are homogeneous in their travel sensitivity, our analysis shows that as consumers’ willingness to travel decreases, it becomes more likely for the firm to offer outlet stores at or near main store locations. This observation is consistent with the anecdotal evidence of an outlet-within-a-store strategy adopted by department stores such as Macy’s, who in contrast to single brand firms (such as Coach) have more uncertainty in consumers’ taste for product offerings leading to a lower willingness to travel. We also show that the introduction of outlet stores leads to higher quality offerings at the main store. When there is fit uncertainty in product offering at the outlet store, in contrast to intuition, as product fit increases, the firm builds the outlet store closer to the main store but increases both product quality and price to take advantage of their increased attraction. We also extend the model to consider consumer heterogeneity in travel sensitivity and the growing trend of urban sprawl.

Differential pricing with consumers’ valuation uncertainty by a monopoly

Traditional price discrimination of a monopoly depends on the knowledge of consumers’ valuation (as measured by willingness-to-pay or WTP). Information about consumer uncertainty on WTP, however, has not been considered explicitly as a way of segmentation for pricing purpose. Based on analytical modeling results at the individual level and simulations of survey data at the segment level, this paper proposes a new way of segmentation based on consumers’ valuation uncertainty (as measured by the range of WTP). Highest profit is attained when both valuation and valuation uncertainty are considered for optimal pricing. Moreover, compared to a segment with low valuation uncertainty, a segment with higher valuation uncertainty tends to have a flatter demand curve. Therefore, if the floor WTP has a non-negative correlation with the range of WTP, high valuation uncertainty leads to a higher optimal price as compared to low valuation uncertainty.

Price Markdowns to Induce Customers to Opt Out of Free Returns

We study a newly emerging product return policy in the retail e-commerce industry. Alongside the conventional free return option, consumers (who face valuation uncertainty pre-purchase) are offered an additional return alternative called opt-out of free return (FO). If the free return option is chosen by consumers, they can return the purchased item over a predetermined grace period for a full refund. However, if consumers forego free return and self-select FO, the firm offers them a price markdown. If the consumers pick this option, they can still return the product during the grace period, but they will have to pay a fixed penalty and a variable penalty proportional to the product's purchase price. With consumers increasingly relying on online shopping, returns have become a considerable issue for e-retailers. This research is primarily motivated by practice where a major e-retailer (Jet.com, the new e-commerce operation of Walmart) has recently initiated implementing the FO policy for some categories of their products. We aim to derive managerial insights on when offering FO would be beneficial to firms, and if they offer it, how the firm can set the optimal markdown level. We formulate the problem as a stochastic optimization problem and analyze and characterize the structure of the optimal policy. We characterize the conditions that lead to the offering of the FO option alongside the free return option. (i) We find that the uncertainty level in the consumers' valuation distribution has a subtle impact on the profitability of providing the FO option alongside the free returns. While conventional wisdom suggests that offering the FO option is more likely to be beneficial as customers' uncertainty about the product's valuation pre-purchase increases, we show that the opposite could be true. Specifically, we show that if the product's expected valuation is large, higher uncertainty in the valuation distribution makes it more likely that offering FO alongside FR is advantageous to the firm. However, with low expected valuation, the lower the uncertainty in consumers' valuation distribution is, the more likely that the FO option is advantageous. (ii) We also examine how the profitability of the FO option is affected when the product's valuation (stochastically) decreases. We find that the salvage value of returns plays a crucial role in how the firm can benefit from offering the FO option as product's valuation decreases. Specifically, offering FO along with FR is more likely to be beneficial as consumers' valuation decreases if the salvage value of a returned product is sufficiently small. Our analysis reveals that offering FO alongside free returns can indeed have a significant positive impact on a retailer's profitability across various settings, demonstrating that the FO policy can be effectively used as a practical remedy in retail to partially recoup the revenue losses associated with returns.

Information disclosure strategies for the intermediary and competitive sellers

Product information plays an important role in consumers’ purchase decisions. In this paper, we develop an analytical model to investigate how the intermediary and sellers manage consumer uncertainty and returns/exchanges by disclosing product information. We find, given the information disclosure tools, the competitive sellers always choose to disclose as much information as possible. By analyzing the intermediary's decision on the development of information tools, our results suggest that the intermediary's optimal information strategy is determined by the disclosure cost and product characteristics (i.e., product value and return cost). The intermediary is likely to invest more to develop information tools if the cost coefficient is low or if the product has a relatively high return cost compared with its value. As a result, the information tools developed by the intermediary facilitate sellers’ information disclosure at a high level. Moreover, considering particular product characteristics and information disclosure cost, we examine the role of revenue sharing fraction between the intermediary and sellers. Our findings suggest that a modified revenue sharing fraction can facilitate firms’ Pareto improvement and lead to an information-rich platform.