Understanding the impact of missing multilevel attributes on choice
(A2021-94511)

AUTHORS

Alaa El-Gayar, Institute of Marketing, School of Business and Economics, Humboldt University Berlin; Daniel Guhl, HU Berlin

ABSTRACT

Numerous consumer decision contexts are characterized by a lack of transparency in terms of incomplete product information. In mystery product selling, firms intentionally withhold product information that remains hidden from consumers until after the transaction. Despite extensive research in this domain, with particular attention to price discrimination and revenue management, the impact on consumer behavior remains unclear. This study develops and compares several models to incorporate the impact of missing brand information in discrete choice models. In this regard, we draw on behavioral theories to construct a latent class model that directly accounts for inference-making strategies. Using choice-based conjoint, we elicit consumer preferences for a mystery product at the example of the market for jeans. The results indicate that consumers do not ignore and moderately evaluate missing brand information. Finally, we discuss practical implications for willingness-to-pay and profits.