Overvaluation Bias in the Valuation and Utilization of New-Product Attributes

Tiebing Shi, Queen's School of Business
Jay M. Handelman, Queen's School of Business
Shenghui (Jerry) Zhao, Marketing Department, The Wharton School
Robert Meyer|Jin Han, Marketing Department, The Wharton School|Singapore Management University
Overvaluation Bias in the Valuation and Utilization of New-Product Attributes


Authors:Shenghui Zhao1
Robert J. Meyer2
Jin Han3

Affiliations:1University of Miami
2University of Pennsylvania
3Singapore Management University
Abstract

The present research examines the consistency between consumer valuation of a novel attribute prior to consumption and its subsequent utilization. Based on the research on dynamic inconsistency, we hypothesized that ex ante valuations would often exceed ex post utilization. A series of experiments were conducted to test this hypothesis and explore the causes of the bias. The results confirmed the hypothesized bias and ruled out inaccurate forecasts of future benefits of the novel attribute as a cause for the bias. Moreover, direct experience with the new attribute did not reduce the bias.
[ to cite ]:
Tiebing Shi, Jay M. Handelman, Shenghui (Jerry) Zhao, and Robert Meyer|Jin Han (2006) ,"Overvaluation Bias in the Valuation and Utilization of New-Product Attributes", in NA - Advances in Consumer Research Volume 33, eds. Connie Pechmann and Linda Price, Duluth, MN : Association for Consumer Research, Pages: 244-244.