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How Dispersive Opinions Affect Consumer Decisions: Endowment Effect Guides Attributional Inferences

Lookup NU author(s): Professor Suraksha Gupta

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Abstract

© 2021Electronic word-of-mouth (eWOM) dispersion, reflecting the extent of reviewers’ opinion divergence regarding a product, determines consumer decisions. Drawing upon the endowment effect and attribution literature, this research proposes that the endowment effect mediates the influence of eWOM dispersion on attributional inferences, and the display formats of eWOM dispersion (“horizontal bar chart” vs. “eWOM content”) moderate the mediating influence of endowment effect on attributional inferences of eWOM dispersion. Three complementary studies reveal three key insights in this setting. First, when consumers already having an emotional attachment to a product and subsequently encountering dispersive eWOM, the higher the level of eWOM dispersion, the stronger the endowment effect. Secondly, In such circumstance, the stronger endowment effect promotes more reviewer-related attribution inference of high-dispersion eWOM, and the weaker endowment effect promotes more product-related attribution inference of low-dispersion eWOM. Third, the positive influence of eWOM dispersion on endowment effect is stronger for eWOM dispersion in the complexity or disfluency display format (i.e. “reviewers’ impression of product”) than for eWOM dispersion in the simply of fluency display format (i.e. “horizontal bar chart”), more importantly, the mediating influence of endowment effect on attributional inferences is moderated by the display formats of eWOM dispersion, and this findings persists even when product category (hedonic vs. utilitarian) is taken into consideration. The theoretical implications for the eWOM dispersion and attribution literature and practical implications for online retailers are discussed.

Publication metadata

Author(s): Xie G, Lu K, Gupta S, Jiang Y, Shi L

Publication type: Article

Publication status: Published

Journal: Journal of Retailing

Year: 2021

Volume: 97

Issue: 4

Pages: 621-638

Print publication date: 01/12/2021

Online publication date: 01/05/2021

Acceptance date: 02/04/2018

ISSN (print): 0022-4359

Publisher: Elsevier Ltd

URL: https://doi.org/10.1016/j.jretai.2021.03.006

DOI: 10.1016/j.jretai.2021.03.006

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