publication . Article . 2008

Research Note---Should Consumers Use the Halo to Form Product Evaluations?

Peter Boatwright; Ajay Kalra; Wei Zhang;
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  • Published: 01 Jan 2008 Journal: Management Science, volume 54, pages 217-223 (issn: 0025-1909, eissn: 1526-5501, Copyright policy)
  • Publisher: Institute for Operations Research and the Management Sciences (INFORMS)
Abstract
In purchase situations where attribute information is either missing or difficult to judge, a well-known heuristic that consumers use to form evaluations is the halo effect. The psychology literature has widely considered the halo a reflection of consumers' inability to discriminate between different attributes and have therefore labeled it the "halo error" or the "logical error." The objective of this paper is to offer a rationale for the halo effect. We use a decision-theory framework to show that the halo is consistent with the goal of minimizing estimation risk. Contrary to conventional wisdom, we demonstrate that a decision using the halo has lower estimati...
Subjects
arXiv: Astrophysics::Cosmology and Extragalactic AstrophysicsAstrophysics::Galaxy Astrophysics
ACM Computing Classification System: ComputingMethodologies_IMAGEPROCESSINGANDCOMPUTERVISIONComputingMethodologies_COMPUTERGRAPHICS
free text keywords: halo effect, decision-theoretic consumer choice, James-Stein estimator, utility preference, Economics, Conventional wisdom, Halo, Mathematical optimization, Decision theory, Econometrics, Complete information, Halo effect, Utility maximization, Heuristic, James–Stein estimator
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publication . Article . 2008

Research Note---Should Consumers Use the Halo to Form Product Evaluations?

Peter Boatwright; Ajay Kalra; Wei Zhang;