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

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  • Xie, Guangming
  • Lü, Kevin
  • Gupta, Suraksha
  • Jiang, Yushi
  • Shi, Li

Abstract

Electronic 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.

Suggested Citation

  • Xie, Guangming & Lü, Kevin & Gupta, Suraksha & Jiang, Yushi & Shi, Li, 2021. "How Dispersive Opinions Affect Consumer Decisions: Endowment Effect Guides Attributional Inferences," Journal of Retailing, Elsevier, vol. 97(4), pages 621-638.
    • Handle: RePEc:eee:jouret:v:97:y:2021:i:4:p:621-638
    DOI: 10.1016/j.jretai.2021.03.006
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    More about this item

    Keywords

    Electronic word-of-mouth dispersion; Endowment effect; Attributional inference; Display format; Product category;
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    JEL classification:

    • M31 - Business Administration and Business Economics; Marketing; Accounting; Personnel Economics - - Marketing and Advertising - - - Marketing

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