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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.

© 2009 INFORMS

Although previous research has demonstrated the importance of emotions in ultimatum bargaining, this research provides a more direct, convergent test of the role of anger in explaining rejections of unfair offers in ultimatum bargaining. First, using appraisal theory of emotions, this research examines the extent to which the cognitive appraisal of unfairness leads to the emotion of anger, which in turn, drives punitive behavior (i.e., rejection of offers). Second, this research explores the possibility of decoupling the emotion of anger from its antecedent appraisal of unfairness in order to attenuate responders' inclination to reject unfair offers. Third, following the current research tradition that goes beyond a valence-based approach, we differentiate between the negative emotions of anger and sadness and examine whether it is the specific emotion of anger that is relevant to the cognitive appraisal of unfairness or the general negative valence of the emotion.

© 2008 John Wiley & Sons, Ltd.

This paper is concerned with the tension between consumer persuasion and freedom of choice. We study how assertive language (as in the slogan Just do it!) affects consumer compliance in hedonic vs. utilitarian contexts. Previous literature consistently claimed that forceful language would cause reactance and decreased compliance. However, we find in four studies that assertive persuasion is effective in contexts involving hedonic goods and hedonically framed utilitarian goods. Our hypotheses emerge from sociolinguistic research and confirm the relevance of linguistic research in consumer behavior.

 

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We consider a make-to-stock supplier that operates a production facility with limited capacity. The supplier receives orders from customers belonging to several demand classes. Some of the customer classes share advance demand information with the supplier by announcing their orders ahead of their due date. However, this advance demand information is not perfect because the customer may decide to order prior to or later than the expected due date or may decide to cancel the order altogether. Customer classes vary in their demand rates, expected due dates, cancellation probabilities, and shortage costs. The supplier must decide when to produce and, whenever an order becomes due, whether or not to satisfy it from on-hand inventory. Hence, the supplier is faced with a joint production-control and inventory-allocation problem. We formulate the problem as a Markov decision process and characterize the structure of the optimal policy. We show that the optimal production policy is a state-dependent base-stock policy with a base-stock level that is nondecreasing in the number of announced orders. We show that the optimal inventory-allocation policy is a state-dependent multilevel rationing policy, with the rationing level for each class nondecreasing in the number of announced orders (regardless of whether the class provides advance information). From numerical results, we obtain several insights into the value of advance demand information for both supplier and customers.

© 2009 INFORMS