How consumers discriminate
A forthcoming paper in the American Marketing Association's Journal of Marketing Research by Professor Sheena Iyengar, S.T. Lee Professor of Business, Management; Marco Bertini, Assistant Professor of Marketing at London Business School; and Luc Wathieu, Associate Professor at McDonough School of Business, Georgetown University, provides evidence on the impact of the size and quality of an assortment has on a consumer when they make purchasing decisions. When consumers are confronted with a proliferation of options, they will sharpen their appreciation of quality, and a switch to superior products will become more enticing. Subsequently, a switch to inferior products will become less tolerable. The research was inspired by the phenomenon that for many upscale goods, such as wine, while variety available to consumers has increased, prices have also increased contrary to economic models that find competition leads to lower prices. This is the first paper to illustrate the effect of...