TY - JOUR
T1 - Ambiguity aversion and the preference for established brands
AU - Muthukrishnan, A. V.
AU - Luc, Wathieu
AU - Xu, Alison Jing
PY - 2009/12
Y1 - 2009/12
N2 - We propose that ambiguity aversion, as introduced in the literature on decision making under uncertainty, drives a preference for established brands in multiattribute choices among branded alternatives. Established brands are those for which belief in quality is held with greater confidence, even if specific attributes might be inferior to those of competing, less-established brands. In five experiments, we examine the role of ambiguity aversion in the preference for dominated, established brands. We first show a correlation between ambiguity aversion (revealed through choices among monetary lotteries) and the preference for established brands. We then show that the preference for established brands is enhanced when ambiguity aversion is made more salient in unrelated preceding lottery choices. Thus, ambiguity aversion carries across choices. In addition, ambiguity aversion and the preference for established brands are both enhanced when subjects anticipate that others will evaluate their lottery choices. Finally, ambiguous information about brand attributes tends to increase the preference for established brands.
AB - We propose that ambiguity aversion, as introduced in the literature on decision making under uncertainty, drives a preference for established brands in multiattribute choices among branded alternatives. Established brands are those for which belief in quality is held with greater confidence, even if specific attributes might be inferior to those of competing, less-established brands. In five experiments, we examine the role of ambiguity aversion in the preference for dominated, established brands. We first show a correlation between ambiguity aversion (revealed through choices among monetary lotteries) and the preference for established brands. We then show that the preference for established brands is enhanced when ambiguity aversion is made more salient in unrelated preceding lottery choices. Thus, ambiguity aversion carries across choices. In addition, ambiguity aversion and the preference for established brands are both enhanced when subjects anticipate that others will evaluate their lottery choices. Finally, ambiguous information about brand attributes tends to increase the preference for established brands.
KW - Ambiguity
KW - Brand preference
KW - Decisions under uncertainty
KW - Multiattribute choice
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U2 - 10.1287/mnsc.1090.1087
DO - 10.1287/mnsc.1090.1087
M3 - Article
AN - SCOPUS:72149097092
SN - 0025-1909
VL - 55
SP - 1933
EP - 1941
JO - Management Science
JF - Management Science
IS - 12
ER -