Covariation Learning, Quality Expectation and Product Valuation Under Homoscedastic and Heteroscedastic Uncertainty

Bart de Langhe, Erasmus University Rotterdam, The Netherlands
Stefano Puntoni, Erasmus University Rotterdam, The Netherlands
Ann L. McGill, University of Chicago, USA
Stijn van Osselaer, Erasmus University Rotterdam, The Netherlands
We establish that cue-outcome (e.g., price-quality) learning depends on whether outcome uncertainty is the same (homoscedastic) or varies (heteroscedastic) for different cue values. Specifically, a series of experiments shows stronger perceived cue-outcome association under heteroscedastic than under homoscedastic outcome uncertainty and demonstrates implications for consumers’ quality expectations and product valuations.
[ to cite ]:
Bart de Langhe, Stefano Puntoni, Ann L. McGill, and Stijn van Osselaer (2011) ,"Covariation Learning, Quality Expectation and Product Valuation Under Homoscedastic and Heteroscedastic Uncertainty", in NA - Advances in Consumer Research Volume 38, eds. Darren W. Dahl, Gita V. Johar, and Stijn M.J. van Osselaer, Duluth, MN : Association for Consumer Research.