Jaewoo teaches and writes about design thinking and behavioral economics for new product development and new product adoption. He is an associate professor of marketing and participating professor of experience design at Kookmin University.
In this paper, we study the online consumer review generation process by analyzing 37.12 million online reviews across nineteen product categories obtained from Amazon.com. This study revealed that the discrepancy between ratings by others and consumers’ post-purchasing evaluations significantly influenced both the valence and quantity of the reviews that consumers generated. Specifically, a negative discrepancy (‘worse than what I read’) significantly accelerates consumers to write negative reviews (19/19 categories supported), while a positive discrepancy (‘better than what I read’) accelerates consumers to write positive reviews (16/19 categories supported). This implies that others’ ratings play an important role in influencing the review generation process by consumers. More interestingly, we found that this discrepancy significantly influences consumers’ neutral review generation, which is known to amplify the effect of positive or negative reviews by affecting consumers’ search behavior or the credibility of the information. However, this effect is asymmetric. While negative discrepancies lead consumers to write more neutral reviews, positive discrepancies help reduce neutral review generation. Furthermore, our findings provide important implications for marketers who tend to generate fake reviews or selectively generate reviews favorable to their products to increase sales. Doing so may backfire on firms because negative discrepancies can accelerate the generation of objective or negative reviews.
I enjoy watching The Chef Show, an American television cooking show. It features actor Jon Favreau and chef Roy Choi with guests. This cooking show challenged my stereotype of Asian chefs and Korean food.
In one episode, Chefs Roy Choi and David Chang demonstrated how to make Kimchi. They broke down the authentic Korean food into 16 ingredients. I was surprised by this because I eat Kimchi everyday but have never listed its ingredients. In sum, two chefs analyzed a holistic item successfully, whereas an everyday consumer failed to do so.
Experts are able to analyze holistic items because they are often asked to do so. Two chefs could list sixteen food ingredients because they have to explain to viewers how to make Kimchi. Similarly, wine lovers could elaborate why they like a specific wine (e.g., Tannin, flavor, color, etc.) because they have to explain to others why they like it.
… We collected leadership cues from two parties, the CEO and employees, and then mapped them onto Brunswik’s Lens Model, a psychological framework often used in Social Judgment Theory. Our newly adopted research framework helps us better understand the designer’s unique leadership style; unlike non-design business CEOs, the design CEO or DEO (Design Executive Officer) used a wide variety of visual cues… the DEO tacitly communicates visual (tangible) cues with employees for reward and authorization. In particular, the DEO is good at incorporating a tangible benefit and infusing a live and vivid characteristic into an environment. We found that the DEO utilizes visual cues effectively when communicating leadership.
People assume that constraint-free activities such as doodling help them become creative. However, psychological researchers suggest a different story, that is, constraints are actually the power house of creativity. Studies showed that people used a given product creatively, enjoyed creative experience, and developed creative toys and when they were provided with a time/input/resource constraint and then overcame it.
Similar to psychological creativity, constraints may contribute to art creativity. I found evidence at the Urban Break 2021, the largest urban and street art fair in Asia.
The Urban Break 2021 proposes the broadened spectrum of the art fair, trying the new contemporary art genre, combined the urban art and the street culture. The urban art is pioneering a new flow, becoming a mainstream icon in the art market. Urban Break is aimed at cultural convergence and extension by embracing native and foreign street artists, galleries and lifestyle brands.
In this art fair, numerous paintings and sculptures made me nervous and confused because I do not understand most of them. Only when I meet the art pieces that look familiar but slightly different, I was able to understand the intentions of the artists, enjoying them. To me, artwork looks creative when its artist communicated with me through something I am familiar with. It does not look creative when its artist communicated with me something I have never seen before.
This suggests that constraint plays a key role to shape creative experience. When artists work with constraints (e.g., something visitors are familiar with such as Mona Lisa painting, David sculpture, or Statue of Liberty), visitors enjoy their paintings and sculptures better and more creatively.
Mehta, R., & Zhu, M. (2016). Creating When You Have Less: The Impact of Resource Scarcity on Product Use Creativity. Journal of Consumer Research, 42(5), 767–782.
Dahl, D. W., & Moreau, C. P. (2007). Thinking Inside the Box: Why Consumers Enjoy Constrained Creative Experiences. Journal of Marketing Research, 44(3), 357–369.
Moreau, C. P., & Dahl, D. W. (2005). Designing the Solution: The Impact of Constraints on Consumers’ Creativity. Journal of Consumer Research, 32(1), 13–22.
Burroughs, J. E., & Mick, D. G. (2004). Exploring Antecedents and Consequences of Consumer Creativity in a Problem-Solving Context. Journal of Consumer Research, 31(2), 402–411.
I drink wine often. It goes well with dinner, helps me read papers, and soothes me at night. In the past, I enjoyed numerous marriages of soil, weather, and grape variety. Now, my tongue is developed although I neither remember one nor am able to elaborate why I like one.
Recently, I went to Urban Break 2021 and saw a pop-up store of Babe Wine, a brand name of a canned wine. It attracted a crowd of visitors. Out of curiosity, I sampled a sip of Grigio, Rose, and Red. They differed from the wine I experienced before. They came out from icy-cold cans and had bubbles. I ended up failing to like this wine.
Why do people like a canned wine I do not? Indeed, I have a long history of prediction errors. On one hand, I once thought that BTS, Tiktok, and Instagram would fail to make a presence. On the other hand, I expected that Clubhouse, a social audio app, and Gathertown, a meta-verse service, would succeed in Korea. Not surprisingly, my predictions were proven to be incorrect.
Then, how could experts like me (e.g., wine lovers) predict whether a product is successful in the market when it is designed for novices (e.g., canned wine)? About 10 years ago, researchers at University of Oxford and New York University suggested that an accurate prediction of an extreme event is an indication of poor forecasting ability. This suggests that even experts who have forecasting abilities predict only non-radical events. Predicting the next hit is beyond our control.
Denrell, J., & Fang, C. (2010). Predicting the Next Big Thing: Success as a Signal of Poor Judgment. Management Science, 56(10), 1653–1667.
Successfully predicting that something will become a big hit seems impressive. Managers and entrepreneurs who have made successful predictions and have invested money on this basis are promoted, become rich, and may end up on the cover of business magazines. In this paper, we show that an accurate prediction about such an extreme event, e.g., a big hit, may in fact be an indication of poor rather than good forecasting ability. We first demonstrate how this conclusion can be derived from a formal model of forecasting. We then illustrate that the basic result is consistent with data from two lab experiments as well as field data on professional forecasts from the Wall Street Journal Survey of Economic Forecasts.
I find myself reading books challenging. Most books are too long to start and I am too busy to finish reading book. Therefore, I have applied numerous insights obtained from behavioral research to force myself to read books.
So far, the most effective method is to buy a physical book. This is particularly effective when the book is not available at a local book store and it needs to be delivered to me in the mail. My intention to finish reading the book *irrationally* increases because it has a physical form and I do not want to waste, interestingly, its delivery cost.
Atasoy, O., & Morewedge, C. K. (2018). Digital Goods Are Valued Less Than Physical Goods. Journal of Consumer Research, 44(6), 1343–1357.
Digital goods are, in many cases, substantive innovations relative to their physical counterparts. Yet, in five experiments, people ascribed less value to digital than to physical versions of the same good. Research participants paid more for, were willing to pay more for, and were more likely to purchase physical goods than equivalent digital goods, including souvenir photographs, books (fiction and nonfiction), and films. Participants valued physical goods more than digital goods whether their value was elicited in an incentive compatible pay-what-you-want paradigm, with willingness to pay, or purchase intention. Greater capacity for physical than digital goods to garner an association with the self (i.e., psychological ownership), underlies the greater value ascribed to physical goods. Differences in psychological ownership for physical and digital goods mediated the difference in their value. Experimentally manipulating antecedents and consequents of psychological ownership (i.e., expected ownership, identity-relevance, perceived control) bounded this effect, and moderated the mediating role of psychological ownership. The findings show how features of objects influence their capacity to garner psychological ownership before they are acquired, and provide theoretical and practical insights for the marketing, psychology, and economics of digital and physical goods.
The second most effective method is to bookmark with sticky notes after briefly reading the table of contents. I often stick only three notes on the pages I want to read to relieve burden. When I see them, I *mistakenly* think I already started reading the book.
Kivetz, R., Urminsky, O., & Zheng, Y. (2006). The Goal-Gradient Hypothesis Resurrected: Purchase Acceleration, Illusionary Goal Progress, and Customer Retention. Journal of Marketing Research, 43(1), 39–58..
The goal-gradient hypothesis denotes the classic finding from behaviorism that animals expend more effort as they approach a reward. Building on this hypothesis, the authors generate new propositions for the human psychology of rewards. They test these propositions using field experiments, secondary customer data, paper-and-pencil problems, and Tobit and logit models. The key findings indicate that (1) participants in a real café reward program purchase coffee more frequently the closer they are to earning a free coffee; (2) Internet users who rate songs in return for reward certificates visit the rating Web site more often, rate more songs per visit, and persist longer in the rating effort as they approach the reward goal; (3) the illusion of progress toward the goal induces purchase acceleration (e.g., customers who receive a 12-stamp coffee card with 2 preexisting “bonus” stamps complete the 10 required purchases faster than customers who receive a “regular” 10-stamp card); and (4) a stronger tendency to accelerate toward the goal predicts greater retention and faster reengagement in the program. The conceptualization and empirical findings are captured by a parsimonious goal-distance model, in which effort investment is a function of the proportion of original distance remaining to the goal. In addition, using statistical and experimental controls, the authors rule out alternative explanations for the observed goal gradients. They discuss the theoretical significance of their findings and the managerial implications for incentive systems, promotions, and customer retention.
Certainly, I want to read more books without tricks. However, I have insufficient self control resources and mispredict my available time. I use these tricks to drive me to start and finish reading books.
Abstract: We investigated whether adding product information in mobile commerce improved consumers’ attitudes toward a product and whether this relationship was moderated by consumption goals. We conducted two field experiments in which we recruited parents in Korea and the USA and asked them how they evaluated two childcare hybrid products (HPs) newly developed by Samsung Electronics designers. The results revealed that participants exposed to additional information about the HPs evaluated them more favorably than those who were not exposed. However, this relationship disappeared when a consumption goal was activated. Our findings establish a dynamic relationship between information seeking and consumption goals, asking designers to rethink their rule of thumb in the mobile commerce context.
Keywords: information seeking; consumption goal; hybrid product; Samsung Electronics; mobile commerce
This paper investigates whether online recommendation of products that exhibit corporate social responsibility (CSR) penalizes the purchase intention of non-CSR products. When consumers browse online retail stores and consider buying a particular product, online recommendation is made (e.g., “Customers who viewed this item also viewed”). This recommendation is often made between products of which attributes have a trade-off relationship (e.g., CSR vs. price). (A trade-off is where one thing increases, and another must decrease. A trade-off relationship between CSR and price suggests a pair of competing products are available: a more expensive, CSR product and an economical, non-CSR product.) We borrowed from the psychological literature of evaluability to hypothesize that when a CSR product is recommended, consumers would decrease their purchase intention of the economical product. However, when an economical product is recommended, consumers would maintain their purchase intention of the CSR product. We further hypothesized that this asymmetric effect would disappear when reinforcement information regarding the CSR is provided. Two carefully designed experiments conducted in China supported these hypotheses. Our findings contribute to the growing literature on online retailers by elucidating the psychological impact of online recommendations, which may influence manufacturers’ sales in an unexpected manner. The findings also indicate that online recommendations could be a potential source of channel conflict. While this study newly verifies the unintended CSR violation effect of online recommendations, future studies are required to expand our understanding of the CSR violation effect by investigating the effect under the trade-off relationship with other attributes of the product.
corporate social responsibility; economical; evaluability; online recommendation
Less is often better. Chris Hsee demonstrated in his experiment that an overfilled ice cream serving with 7 oz of ice cream was valued more than an underfilled serving with 8 oz of ice cream. However, participants indicated greater willingness to pay for an underfilled ice cream than an overfilled one ($1.85 vs. $1.56). This is because, according to him, when participants determined the value of each option alone (i.e., separate evaluation), they focused on an easy-to-evaluate attribute (whether an ice cream is overfilled or underfilled) and failed to consider a hard-to-evaluate attribute (the amount of ice cream). However when indicating their willingness to pay together (i.e., joint evaluation), they considered the hard-to-evaluate attribute important. Note that a hard-to-evaluate attribute is an attribute that “people do not know whether a given value on that attribute is good or bad.”
I had a similar experience at the Nicolai Bergmann, a flower shop located in Seoul, Korea. A preserved, overfilled flower attracted my attention when I entered the store. However, I found another flower next to it and it was in a square box. Although the overfilled flower attracted me first, I chose the boxed one for several reasons. The primary reason was that when comparing these two flowers side-by-side, I considered their hard-to-evaluate attribute (the amount of flower) seriously. I expect many other visitors may reach the same conclusion.
This research demonstrates a less-is-better effect in three contexts: (1) a person giving a $45 scarf as a gift was perceived to be more generous than one giving a $55 coat; (2) an overfilled ice cream serving with 7 oz of ice cream was valued more than an underfilled serving with 8 oz of ice cream; (3) a dinnerware set with 24 intact pieces was judged more favourably than one with 31 intact pieces (including the same 24) plus a few broken ones. This less-is-better effect occurred only when the options were evaluated separately, and reversed itself when the options were juxtaposed. These results are explained in terms of the evaluability hypothesis, which states that separate evaluations of objects are often infuenced by attributes which are easy to evaluate rather than by those which are important.
Wearing a face mask is mandatory in many restaurants. However, we take our mask off when the food comes. Experts often suggest diners to bring a clean, breathable container like a small mesh laundry bag or a brown bag to put the mask in. However, I have not formed this healthy habit yet. Therefore, I often place my mask on the table and then blame myself.
Recently, I found a clever solution for this issue at Joo Ok, a Korean contemporary dining restaurant in Seoul. This restaurant does not blame me but helps me follow rule.
Joo Ok is the creation of Chef Shin Chang Ho, winner of a Michelin star in the 2018 – 2021 editions of The Michelin Guide to Seoul. Its cuisine captures the essence of Korea’s four seasons, based on fermented jang sauces and vinegar, the pillars of Korean cuisine. Perilla oil pressed from seeds harvested in Chef Shin’s mother-in-law’s vegetable garden in Jinju, and some 30 varieties of homemade vinegar, brewed using proprietary recipes, are the stars of Joo Ok’s cuisine.
In this restaurant, diners are provided with mask pockets made by recycled paper. Certainly, they are not permanent and feasible solutions for every single restaurant. However, after having experienced a carefully designed mask bag, I start considering whether a mask bag is on the table when evaluating my restaurant experience.
Subscription-based model attracts attention. It helps firms to stabilize profits, obtain insights, and forecast sales, enabling them sustain.
However, marketers have to pay attention to consumer psychology when they develop a subscription service. That is, pain of payment is detached from joy of enjoyment. When consumers consider subscribing a service or not, they emphasize the realized pain of payment rather than their expected joy of enjoyment. In this case, they tend to rely on “lay rationalism” and base their decisions on reason than on feeelings (Hsee et al. 2014, pg. 134). In order to use reason to guide decisions, consumers may calculate the cost effectiveness of a service rigorously (e.g., how much I will enjoy later based on how much I pay now).
Since payment-enjoyment time gap leads consumers to rely on lay rationalism, they may like a subscription service that is is easy to calculate its cost effectiveness. Take an example of the following 2 TB Dropbox service. The cost effectiveness of the two billing cycle options are easy to calculate and easy to compare because their pay period is identical (month). I subscribed this Dropbox service because I found it easy to calculate cost effectiveness.
In contrast, when cost effectiveness is difficult to calculate, a subscription service may not be chosen. Take an example of the following 3 TB Dropbox space. In this case, the cost effectiveness of the two billing cycle options are difficult to calculate and difficult to compare because their pay periods differ (year vs. month). I assume many others hesitate to choose one of the two options.
People have a lay notion of rationality—that is, the notion of using reason rather than feelings to guide decisions. Yet people differ in the degree to which they actually base their decisions on reason versus feelings. This individual difference variable is potentially general and important but is largely overlooked. The present research (1) introduces the construct of lay rationalism to capture this individual difference variable and distinguishes it from other individual difference variables; (2) develops a short, easy-to-implement scale to measure lay rationalism and demonstrates the validity and reliability of the scale; and (3) shows that lay rationalism, as measured by the scale, can predict a variety of consumer-relevant behaviors, including product preferences, savings decisions, and donation behaviors.
Jaewoo Joo | design thinking, behavioral economics, new product development, new product adoption