Consumer Market Beliefs: a Review of the Literature and an Agenda For Future Research

Calvin P. Duncan, University of Colorado-Boulder
ABSTRACT - Consumer market beliefs are an important and under-researched construct in consumer research. It is argued that strongly held market beliefs serve to simplify consumer decision making by directing search and evaluation activities. The paper explicates the construct of market beliefs and reports findings from an empirical study which illustrate popular market beliefs. Future research directions are then outlined.
[ to cite ]:
Calvin P. Duncan (1990) ,"Consumer Market Beliefs: a Review of the Literature and an Agenda For Future Research", in NA - Advances in Consumer Research Volume 17, eds. Marvin E. Goldberg, Gerald Gorn, and Richard W. Pollay, Provo, UT : Association for Consumer Research, Pages: 729-736.

Advances in Consumer Research Volume 17, 1990      Pages 729-736

CONSUMER MARKET BELIEFS: A REVIEW OF THE LITERATURE AND AN AGENDA FOR FUTURE RESEARCH

Calvin P. Duncan, University of Colorado-Boulder

ABSTRACT -

Consumer market beliefs are an important and under-researched construct in consumer research. It is argued that strongly held market beliefs serve to simplify consumer decision making by directing search and evaluation activities. The paper explicates the construct of market beliefs and reports findings from an empirical study which illustrate popular market beliefs. Future research directions are then outlined.

INTRODUCTION

Consumer researchers have adopted various theories of cognition and information processing to describe consumer decision making behavior. In most of these theories, consumers are portrayed as information gatherers and integrators whose judgments result from movement through a series of cognitive stages (e.g., attention, encoding, memory retrieval, etc.). A frequently reported finding is that decision minded consumers process information sparingly (e.g. Hogarth 1980; Bettman 1979); memory retrieval is selective and external search and evaluation efforts are influenced by considerations of efficiency and past effectiveness. One construct which helps explain how consumers simplify their processing activities is prior beliefs.

Prior beliefs, as used here, are general opinions that are formed from experience and used to reduce complex judgments to simpler cognitive operations. One characteristic of prior beliefs is that they vary in their specificity and the manner in which they are employed. Thus Tversky and Kahneman (1973, 1974) have identified a relatively small number of broad-based prior beliefs, in the form of judgmental principles or heuristics, which are applicable across a wide range of decision settings. Decision makers, for example, may reveal a belief in local representativeness: they rely on results from small samples to be valid indicators of entire populations (Tversky and Kahneman 1971). Adherence to this "law of small numbers" belief may influence information processing behavior, especially in discouraging elaborate pre-decision search.

Other prior beliefs operate at a more detailed level. In contrast to the general purpose heuristics identified by Tversky and Kahneman, more context-specific beliefs are applied in particular decision environments. Thus, a baseball manager relies on the strategy, "When behind in the ninth inning, it's best to go for the tie at home and the win on the road." Similarly, a business employer may believe that a job applicant's professionalism is indicated by the neatness of her attire. Even the student, when confronted with a multiple choice exam question resorts to the rule that "Statements containing extreme words such as 'always' or 'never' should be marked false" (Sherman and Corty 1984). This paper addresses the role that context-specific prior beliefs play in still another decision environment, the consumer marketplace.

The purpose of this paper is to stimulate additional interest in prior market beliefs as a potentially valuable construct for explaining consumer decision behavior. The paper begins with a definition of prior market beliefs (hereafter referred to as "market beliefs") and a discussion of some of their basic characteristics. Theoretical and empirical contributions from previous research in the area are reviewed. Some preliminary empirical findings are then reported and an agenda for future research is proposed.

CONSUMER MARKET BELIEFS

In the marketing literature, beliefs typically have been conceptualized in narrow, object-attribute terms: beliefs are linkages between a particular brand and specific brand attributes, i.e., "consumer k's belief as to the extent to which attribute i is offered by brand j" (Wilkie and Pessemier 1973, p. 429). However, as Duncan and Olshavsky (1982) point out, not all consumer beliefs are of this kind. Beliefs may also express more generalized associations--between classes of objects (e.g., buyers, products, vendors), between product attributes (e.g., price, quality), and as notions about how the marketplace operates over time (e.g., competition, change).

Market beliefs, then, are defined as intermediate level beliefs which convey information about the association between independent market concepts (adapted from Kendler 1968, p. 579). They are more specific in context than judgmental principles; yet, more general in their application than brand-attribute beliefs. They assume more than one type or function. Many market beliefs appear as simple decision rules, incorporating product or store cues as surrogate indicators of more complex information. Other beliefs are expressions of opinion about the shopper's own abilities as a judge, variances in market offerings, or keys to success in the marketplace (Duncan and Olshavsky 1982). Examples of specific market beliefs include: "Smaller stores charge more for the same brands than larger stores," "More heavily advertised products are more expensive to buy," "Products in end-of-aisle displays are usually on sale," "Sales people always push their most profitable items," "I am a poor judge when it comes to evaluating technical products," and "In general, warranties are worthless."

Consumers use market beliefs because they provide focus. They encourage the individual to selectively attend lo specific aspects of the information environment. In doing so, they reduce decision complexity and enable the decision maker to make judgments more quickly and with less cognitive effort than if a more thorough analysis were undertaken (Sherman and Corty 1984). Consider an individual searching for a new compact disk player. Assume that this shopper holds the following market beliefs: "In most product categories, the top brands are all about the same," "Price is rarely a reliable indicator of product quality," "Advertising costs are passed on to buyers in the form of higher prices," "The longer a product's warranty, the more dependable it is," and "It's always a good idea to stick with brands you know." In combination, these beliefs can be expected to shape and simplify the buyer's information processing task. As he begins his decision making process, he will probably scan memory for information on brand familiarity and brand advertising. He is likely to search for and selectively attend to specific external cues: top brand names, relative prices, and product warranties. Finally, he will evaluate alternatives by considering the top brands, shying away from those perceived to be most heavily advertised or highest priced, and identifying ones offering longer warranty periods. Additional strongly held beliefs such as "Foreign manufacturers are superior to American firms in electronics and high technology product categories" and "High volume stores offer the best deals" may serve to constrain his problem space still further. This illustration is simplistic, of course. Market beliefs are typically not the only influence or even the most important influence on consumer information processing behavior. Nevertheless, such beliefs appear to play a key role in explaining how buyers cope with information complexity by relying on experience-based opinions and biases to collapse the choice process. The illustration suggests some other general characteristics of consumer market beliefs

1. Each consumer subscribes to a large number of market beliefs, although only a few may be salient for a given decision.

2. Individual market beliefs vary in their universality. Some beliefs are widely shared ("Price is a reliable indicator of quality") while others are idiosyncratic ("Large corporations are politically corrupt and their products should be avoided").

3. The salience of market beliefs and the confidence with which they are employed are situationally dependent.

4. Market beliefs can be employed individually and in combinations. Combinations of beliefs are often hierarchical in nature, where one belief is built on another ("Firms with the best products sell the most"..."Firms that sell the most, make the greatest profit"..."Profitable firms do more advertising"...Therefore, "Firms which do the- most advertising, sell the best products.")

5. Market beliefs, once formed, are resistant to change.

PAST RESEARCH

A growing number of studies in consumer behavior have found empirical support for the notion that prior knowledge influences information processing behavior (Bettman and Park 1980; Kardes 1986; Park 1976; Park and Lessig 1981; Rao and Monroe 1988; Srull 1983). Although prior knowledge can take different forms in memory (Hastie 1981; Hayes-Roth 1977; Rummelhart 1981), much of the previous research has looked at the effects of knowledge level, where amount of knowledge is measured in terms of either perceived or objective product knowledge. Thus, Alba (1983) reported that subjects high on self-reported knowledge could recall from memory significantly more product information than less expert subjects. Johnson and Russo (1984) found support for an "inverted U" relationship between degree of subjective product familiarity and total amount of new product information recalled. Finally, Brucks (1985) reported level of product class knowledge to be positively related to a third dimension of information processing activity, variability of prepurchase search.

Market beliefs represent another aspect of a buyer's knowledge structure. Although level of knowledge has been linked to the formation of market beliefs (Park and Lessig 1981; Rao and Monroe 1988), relatively few studies in consumer behavior have focused on the impact of market beliefs on buyer decision making. The present review of this literature identifies three distinguishable research approaches.

The first approach includes studies which have investigated specific market beliefs relating to the evaluation of hidden product benefits. Economists have long observed that, in imperfect information markets, buyers will use prices to signal level of quality among unfamiliar alternatives (Sciotvsky 1945; Wolinsky 1983). In marketing, a number of researchers have confirmed that consumers frequently do subscribe to a "price is a reliable indicator of product quality" belief (e.g., Enis and Stafford 1969; Gardner 1970; Monroe 1976; Olson 1977). Inferences of product quality have also been linked to level of seller's advertising expenditures (Salop 1978), market share (FTC Publication 1979), product warranty (Kelley 1988; Priest 1981; Wiener 1985), brand image (Allison and Uhl 1964; Gardner 1971; Jacoby, Szybillo, and Busato-Schach 1977), length of time in business (Beales et al. 1981), and country of manufacture (Lillis and Narayana 1974). Olshavsky (1984) has tied the use of such surrogate based beliefs to decision making, identifying them as one of five consumer preference formation behaviors which can ultimately affect brand (or store) choice. He contends that adoption of a surrogate-based preference formation strategy may reduce search by causing the buyer to focus on cues in lieu of other available information. One correlate of this argument is that the more reliable the surrogate is perceived to be, the less search and evaluation effort the decision maker will expend.

A second, related research stream has also dealt with surrogate-based market beliefs but is narrower in its emphasis. Here, researchers have focused on a single market belief, "price is positively related to quality," to investigate how beliefs may be formed and, once formed, how they may impact on patterns of information search and evaluation. Borrowing from work on the judgment of covariation by social perceivers (Crocker 1981), Bettman, John, and Scott (1984, 1986) identified covariation beliefs as one type of prior market belief. Covariation beliefs "refer to those beliefs regarding the degree of relationship or association between two events or concepts" (1986: p. 316). They are learned through the processes of hypothesis-testing and assessment of covariation (Crocker 1981). The hypothesis-testing model suggests that consumers develop notions about market relationships, prototypical products, effective buying strategies, and so forth. For example, after observing friendlier service in stores which are smaller in size, an individual may hypothesize a relationship (recognize a covariation) between service and store size. According to the model, the consumer will assess the adequacy of the hypothesis by sampling and interpreting additional information. He will revise the hypothesis if necessary and use it to guide behavior only as it becomes validated.

In a study that investigated the price-quality relationship as a covariation belief, John, Scott, and Bettman (1986) reported that subjects who believed that price was positively correlated with product quality tended to sample higher priced products than subjects who did not subscribe to the belief. These findings, and subsequent work by Grimm and Agrawal (1988), indicate that the hypothesis testing process is biased; the content of prior surrogate-based market beliefs has a systematic effect on subsequent information search patterns.

A third approach to the investigation of market beliefs was taken by Duncan and Olshavsky (1982). These authors conducted a survey of 164 recent color TV purchasers in an attempt to (1) identify a diverse set of commonly held market beliefs and (2) Find empirical support for hypothesized associations between specific belief endorsements and types of information seeking behavior. Twenty-seven market beliefs were isolated. They varied in content from "benefits of search" and "attribute surrogate" items to beliefs pertaining to perceived "variance of offerings" in the market. Eleven of the 27 beliefs were classified as "alternative limiting" in function. The authors hypothesized that all 27 beliefs would affect amount of information search for a new color TV set. Alternative limiting beliefs were those beliefs which were expected, a priori, to have a significant impact on the type of brands or stores considered during the decision process. It was through their influence on size and composition of the buyer's consideration set that alternative limiting beliefs were expected to reduce total amount of information seeking.

Bivariate correlations between market belief endorsements scores and extent of search were found to be statistically significant (in the predicted direction) for 15 of the 27 belief items. Although regression analysis revealed only five of the 27 beliefs to be significantly related to extent of search, the model explained 50% of the variance in prepurchase information seeking among the color TV buyers. Finally, five of the 11 alternative limiting beliefs influenced type of brand and store actually patronized.

Duncan and Olshavsky described their findings as "encouraging" and called for additional research in a number of areas. Perhaps most pressing in their view is the need to generate a more comprehensive inventory of market beliefs of all types.

MARKET BELIEF ITEMS: ADDITIONAL EMPIRICAL FINDINGS

A research program is currently underway to broaden and extend previous findings on market beliefs. An initial phase of this program involves the generation of a more comprehensive list of consumers' market beliefs. Selected preliminary findings from this research are presented here.

Data were collected from a convenience sample of nine individuals living in a medium sized city in the western United States. Participants were either personal acquaintances of the project team or individuals solicited through an advertisement for study volunteers. Respondents included five men and four women, all between the ages of 21 and 55 and from different households. All participants were aware that they would receive $20.00 for their involvement in the study. At a prearranged time, an interviewer met with each of the participants in his (her) home to explain the purpose of the study, define terms (e.g., "market beliefs"), discuss study procedures, and answer questions. Participants were given written instructions and a response form to guide their activities.

Participants were given one week to complete their tasks. Instructions to individual respondents varied, although each included both a "shopping experience" and a "scenario response" component. One purpose of the study was to test different data collection approaches to identify methods which are most effective in encouraging individuals to reveal their market beliefs. The shopping experience task required respondents to engage in an actual shopping visit to spur their thinking about beliefs. During the week, each person was asked to (1) visit and examine merchandise in either a shopping center or two different types of stores, and (2) record as many market beliefs as possible (while on site and later at home).

After a reminder phone call at mid week, a second meeting was arranged. At this time, the interviewer reviewed each participant's recorded entries, requested clarifications, and obtained feedback on the procedure. The interviewer then asked the respondent to listen to and then react to one of three decision scenarios. The purpose of this part of the interview was to probe for additional market beliefs not elicited from actual store visits. Each scenario involved a different hypothetical decision task (e.g., a stranger, who for some reason specified in the scenario, knows nothing about shopping, products, or stores, and seeks advice and useful guidelines on how to understand the marketplace and make effective buying decisions). Upon completion of the scenario response task, respondents answered questions on demographic variables and received payment. Interview sessions lasted between 60 and 90 minutes.

Analysis of findings produced over 150 items which were interpreted to be market beliefs. A subset of these items, grouped into descriptive categories, is shown the Table. Many of the beliefs take the form of surrogate-based opinions expressing a relationship between an external product (store) cue and some benefit or quality (e.g., "The more sales people there are in a store, the more expensive are its products"). Other beliefs communicate buyer convictions about his (her) own ability as a shopper, the benefits and advisability of search activity, and preferred shopping strategies. In some cases, items are shown in combinations to accurately record the respondent's stream of logic (e.g., "When you are not sure what you need in a product, it's a good idea to invest in the extra features. You'll probably wish you had them later." and "It's advisable to stay away from products when they are new to the market. It usually takes the manufacturer a little time to work the bugs out.").

This research also provided useful insights on the strengths and weaknesses of the belief elicitation techniques used in the study. In general, the hypothetical scenarios performed well although specific areas in need of refinement were identified.

DIRECTIONS FOR FUTURE RESEARCH

Thus far, research on market beliefs has been largely exploratory in its approach and more piecemeal than programmic in its content. This is not surprising. One obvious reason is that the study of market beliefs has not been viewed as a separate, integrated research area. Instead, investigators have focused more narrowly on the examination of screening devices, information signals, and covariation beliefs or more broadly on consumer inferential beliefs and decision heuristics--all of which are related to market beliefs.

The argument for integrating separate research streams under the umbrella of "market beliefs" is more semantic than substantive. The important point is that our understanding in these areas can be improved if common elements of each research area are identified, overlapping terminology and conceptualizations are reconciled and simplified, and a more integrative, systematic approach is taken in future research.

With these thoughts in mind, an agenda for future research on market beliefs is proposed. Six issue areas are identified and briefly described.

Composition of Beliefs and Belief Structures. Results from the empirical study described earlier in this paper suggest that it is possible to identify a large number of market beliefs. However, our interest is confined in those beliefs which are widely endorsed (positively or negatively) and frequently applied in decision making. Future studies should use structured and unstructured response formats to uncover as many additional popular beliefs as possible. Moreover, further work is needed to determine the underlying dimensionality of known market beliefs. A factor analysis performed by Duncan and Olshavsky (1982) on subject endorsements of 27 beliefs produced mixed results. Although belief dimensions emerged (including "ability to judge"), patterns of factor loadings made their interpretation difficult. A priori, we might expect future researchers to find separate and relatively well defined market beliefs dimensions.

Belief Endorsements--By Whom? Once a collection of popular beliefs is identified, we should determine who holds them and to what degree. Are there distinguishable patterns in the belief structures of different consumer groups? For example, do belief endorsements (and the confidence in those endorsements) correlate with gender, age, education, or other variables?

Effect of Market Beliefs on Behavior. Past findings suggest market beliefs, as part of the consumer's knowledge structure, do exert an influence on information processing and final choice behavior. Future research should attempt to clarify and extend these results. For example, Furse, Punj and Stewart (1984) reported evidence in support of a beliefs-search relationship but were quick to note that "no simple relationship was found between the amount and type of search and such (belief) variables..." (p.424). Similarly, while common sense and limited empirical work suggests that beliefs such as "the best brands are usually the ones that sell the most" and "heavily advertised brands are overpriced" will influence the composition of a decision maker's evoked set and, thus, his evaluation process, additional research is needed to confirm the strength and frequency of these effects.

Conditions Under Which Market Beliefs Are Employed. Consumers appear to apply their market beliefs selectively. What are the circumstances under which market beliefs are more (or less) likely to be used as part of the consumer's decision process? When beliefs are incorporated into a decision, which factors determine the specific beliefs that will become salient? Past research has failed to clearly resolve these issues.

Variables posited to influence the use of market beliefs include: level of consumer knowledge (Beattie 1981; Park and Lessig 1981; Rao and Monroe 1988), consumer involvement (Furse, Punj, and Steward 1984), task complexity and ambiguity (Henry 1980), and stage in the decision process (Bettman 1979). Yet, the manner in which these factors may affect the employment of market beliefs is unclear. For example, consumers with little product knowledge (novices) may resort to simplifying beliefs ("the highest priced brand is the best") as a means of coping with market uncertainty. Experts, however, may also employ market beliefs, but for a different reason. Possessing well developed knowledge structures, they use beliefs as a tested, reliable way to make decisions easily. Future studies need to clarify the role that product knowledge and other factors play in influencing consumer dependence on market beliefs.

TABLE

SELECTED MARKET BELIEFS

At the same time, additional research on how market beliefs are organized in memory may provide clues as to how specific beliefs are retrieved and utilized. Deighton (1983) and others have suggested that individual beliefs may be stored in memory as components of schemata. It can be hypothesized that, as a particular schema is activated, the market beliefs associated with the schema become available to the individual for use in decision making.

Accuracy of Consumer Market Beliefs. Clearly, beliefs do not always correspond to reality; they are not always applied in an accurate way. In many cases, this is true because specific conditions create exceptions to generally observed relationships. Heavy advertising may indeed cause prices to be higher. But higher costs are not always passed on to the consumer. Moreover, advertising's demand stimulation effect may actually cause price per unit to decline in certain situations. The misapplication of "wrong" beliefs represents an intriguing opportunity for empirical research. Are there commonly held market beliefs that are inaccurate much of the time? What are the effects of inaccurate beliefs on consumers' information processing and choice behaviors?

Belief Formation, Durability, and Resistance to Change To the extent that market beliefs affect decision behavior, an understanding of how they are originally formed appears useful. Like all beliefs, market beliefs may be formed directly--though observation of a relation between two concepts or receipt of information about such a relation--or indirectly through an inferencing process (Fishbein and Ajzen 1975). Beliefs formed from inferencing are derived from other beliefs already held by the consumer. This process suggests that these beliefs (developed through inferencing) may be organized in hierarchical fashion in memory. If so, they may be retrieved and applied as part of the same information chunk.

Finally, as Duncan and Olshavsky (1982) observed in their earlier research, it is important for product manufacturers and store owners to understand the difficulty involved in effecting belief change. For example, consider the problem that a manufacturer of prestige brands may encounter when it decides to distribute in mass merchandise outlets. If potential buyers of prestige brands share the belief that mass merchandise stores carry less expensive or lower quality merchandise, they may (1) eliminate mass merchandise stores from their store set, or (2) lower their quality perceptions of these brands when they are encountered in the mass merchandise environment. The work of John et al. (1986) suggests that market beliefs may be difficult to change because consumers tend to gather information that is consistent with their prior beliefs. Additional research is needed to determine how market beliefs can be changed with special attention given to the problems involved in reversing inaccurate or false beliefs.

CONCLUSION

In the past decade, consumer researchers have begun to look at the effects of consumer knowledge structure on information processing and choice behavior. In only a few cases, however, has this interest focused on the role of consumers' prior beliefs as a dimension of knowledge content. This paper has attempted to consolidate past research related to market beliefs. It contends that additional conceptual and empirical development is needed to explore the nature of market beliefs and their impact on consumer search and evaluation processes.

REFERENCES

Alba, Joseph W. (1983), "The Effects of Product Knowledge on the Comprehension, Retention and Evaluation of Product Information," in Advances in Consumer Research, Vol 10, eds. Richard P. Bagozzi and Alice M. Tybout, Ann Arbor, MI: Association for Consumer Research, 577-580.

Allison, Robert and K. Uhl (1964), "Influence of Beer Brand Identification on Taste Perception," Journal of Marketing Research, 1 (August), 3639.

Beales, Howard, M. Mazis, S. Salop, and R. Staelin (1981), "Consumer Search and Public Policy," Journal of Consumer Research, 8 (June), 11-22.

Beattie, Ann E. (1981), "Effects of Product Knowledge on Comparison, Memory, Evaluation, and Choice: A Model of Expertise in Consumer Decision Making," in Advances in Consumer Research, ed. Andrew Mitchell, Vol. 9, St. Louis: Association for Consumer Research, 33641.

Bettman, James (1979), An Information Processing Theory of Consumer Choice, Reading MA: Addison-Wesley Publishing Company.

Bettman, James, D. R. John, and C. Scott (1984), "Consumers' Assessment of Covariation," in Advances in Consumer Research, Vol. 11, ed. Thomas C. Kinnear, Provo, Utah: Association for Consumer Research, 466-71.

Bettman, James, D. R. John, and C. Scott (1986), "Covariation Assessment by Consumers," Journal of Consumer Research, 13 (December), 316-26.

Bettman, James and C. W. Park (1980), "Effects of Prior Knowledge and Experience and Phase of the Choice Process on Consumer Decision Processes: A Protocol Analysis," Journal of Consumer Research, 7 (December), 234-48.

Brucks, Merrie (1985), 'The Effects of Product Class Knowledge on Information Search Behavior," Journal of Consumer Research, 12 (June), 1-16.

Crocker, Jennifer (1981), "Judgement of Covariation by Social Perceivers," Psychological Bulletin, 90, No.2, 272-92.

Deighton, John (1983), "How To Solve Problems That Don't Matter: Some Heuristics for Uninvolved Thinking," in Advances in Consumer Research, ed. R. P. Bagozzi and Alice M. Tybout, Vol. 10, Ann Arbor, MI: Association for Consumer Research, 314-17.

Duncan, Calvin P. and R. W. Olshavsky (1982), "External Search: The Role of Consumer Beliefs," Journal of Marketing Research, 19 (February), 3243.

Enis, Ben M. and J. E. Stafford (1969), "Consumers' Perceptions of Product as a Function of Various Informational Inputs," in Marketing Involvement in Society and the Economy, ed. P. R. McDonald, Chicago: American Marketing Association, 34044.

Federal Trade Commission Publication (1979), "Consumer Information Remedies," (June), 3161.

Furse, David H., G. Punj, and D. Stewart (1984), "A Typology of Individual Search Strategies Among Purchasers of New Automobiles," Journal of Consumer Research, 10 (March), 417-31.

Gardner, David (1970), "An Experimental Investigation of the Price-Quality Relationship," Journal of Retailing, 46 (Fall), 3940.

Gardner, David (1971), "Is There a Generalized Price-Quality Relationship?" Journal of Marketing Research, 8 (May), 24143.

Grimm, Pamela E. and J. Agrawal (1988), 'The Effects of Prior Beliefs on Patterns of Information Search and Evaluation," Paper presented at Winter Marketing Educators' Conference, American Marketing Association, St. Petersburg, FL, (February).

Hastie, Reid (1981), "Schematic Principles in Human Memory," in Social Cognition: The Ontario Symposium, eds. E. T. Higgins, C. P. Herman, and M. P. Zanna, Hillsdale, N.J.: Erlbaum.

Hayes-Roth, Barbara (1977), "Evaluation of Cognitive Structures and Processes," Psychological Review, 84 (May), 260-78.

Henry, Walter A. (1980), "The Effect of Information Processing Ability on Processing Accuracy," Journal of Consumer Research, 7 (June), 4248.

Hogarth, R. M. (1980), Judgement and Choice The Psychology of Decision, Chichester, England: Wiley.

Jacoby, Jacob, G. Szybillo, and J. Busato-Schach (19779, "Information Acquisition Behavior in Brand Choice Situations," Journal of Consumer Research, 3 (March), 209-16.

John, Deborah Roedder, C. Scott, and J. Bettman (1986), "Sampling Data for Covariation Assessment: The Effect of Prior Beliefs on Search Patterns," Journal of Consumer Research, 13 (June), 38-47.

Johnson, Eric and J. E. Russo (1984), "Product Familiarity and Learning New Information," Journal of Consumer Research, 11 (June), 542-50.

Kardes, Frank (1986), "Effects of Initial Product Judgements on Subsequent Memory-Based Judgements," Journal of Consumer Research, 13 (June), 1-11.

Kelley, Craig A. (1988), "An Investigation of Consumer Product Warranties as Market Signals of Product Reliability," Journal of the Academy of Marketing Science, 16 (Summer), 72-78.

Kendler, H. H. (1968), Basic Psychology, Second edition, New York: Appleton-Century-Crofts.

Lillis, Charles M. and C. Narayana (1974), "Analysis of 'Made-In' Product Images--An Exploratory Study," Journal of International Business Studies, 50 (Spring), 119-27.

Monroe, Kent B. (1976), "The Influence of Price Differences and Brand Familiarity on Brand Preferences," Journal of Consumer Research, 3 (June), 42-49.

Olshavsky, Richard W. (1985), "Perceived Quality in Consumer Decision Making," in Perceived Quality, eds. Jacob Jacoby and Jerry Olson, Lexington, MA: Lexington Books.

Olson, Jerry C. (1977), "Price as an Informational Cue: Effects on Product Evaluations," in Consumer and Industrial Buying Behavior, eds. Arch G. Woodside et al., New York: North-Holland, 267-86.

Park, C. Whan (1976), 'The Effect of Individual and Situation-Related Factors on Consumer Selection of Judgmental Models," Journal of Marketing Research, 8 (May), 144-51.

Park, C. Whan and P. V. Lessig (1981), "Familiarity and Its Impacts on Consumer Decision Biases and Heuristics," Journal of Consumer Research, 8 (September), 223-30.

Priest, George L. (1981), "A Theory of the Consumer Product Warranty," The Yale Law Journal, 90 (May), 1297- 1352.

Rao, Akshay R. and K. Monroe (1988), "The Moderating Effect of Prior Knowledge on Cue Utilization in Product Evaluations," Journal of Consumer Research, 15 (September), 253-64.

Rummelhart, D. E. (1981), "Schemata: The Building Blocks of Cognition," in Theoretical Issues in Reading Comprehension, eds. R. Spiro, B. Bruce and W. Brewer, Hillsdale, N.J.: Lawrence Erlbaum.

Salop, Steven (1979), "Parables of Information Transmission in Markets," in The Effect of Information on Consumer Market Behavior, ed. A. Mitchell, Chicago: American Marketing Association, 3-12.

Scitovsky, Tibor (1945), "Some Consequences of the Habit of Judging Quality By Price," The Review of Economic Studies, 12, No. 32, 100-105.

Sherman, Steven J. and Eric Corty (1984), "Cognitive Heuristics," in Handbook of Social Cognition, Vol. 1, eds. R. S. Wyler and T. K. Srull. Hillsdale, N. J.: Lawrence Erlbaum.

Srull, Thomas K. (1983), '"The Role of Prior Knowledge in the Acquisition, Retention, and Use of New Information," in Advances in Consumer Research, Vol. 10, eds. R. P. Bagozzi and A. M. Tybout, Ann Arbor, MI: Association for Consumer Research, 572-76.

Tversky, Amos and D. Kahneman (1971), "Belief in the Law of Small Numbers," Psychological Bulletin, 76, 105-110.

Tversky, Amos and D. Kahneman (1973), "Availability: A Heuristic for Judging Frequency and Probability," Cognitive Psychology, 5, 207-32.

Tversky, Amos and D. Kahneman (1974), "Judgement Under Uncertainty: Heuristics and Biases," Science, 185, 1 124-1 131.

Wiener, Joshua L. (1985), "Are Warranties Accurate Signals of Product Reliability?" Journal of Consumer Research, 12 (September), 245-50.

Wilkie, William L. and E. A. Pessemier (1973), "Issues in Marketing's Use of Multiattribute Attitude Models, Journal of Marketing Research, 10 (November), 42841.

Wolinsky, Asher (1983), "Prices as Signals of Product Quality," Review of Economic Studies, 50 (October), 647-58.

----------------------------------------