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The Fun and Function of Uncertainty: Uncertain Incentives Reinforce Repetition Decisions

Author

Listed:
  • Luxi Shen
  • Christopher K Hsee
  • Joachim H Talloen
  • Gita V JoharEditor
  • Amna KirmaniEditor
  • Stijn M J van Osselaer

Abstract

This research studies repetition decisions—namely, whether to repeat a behavior (e.g., a purchase) after receiving an incentive (e.g., a discount). Can uncertainty drive repetition? Four experiments, all involving real consequences for each individual participant, document a counterintuitive reinforcing-uncertainty effect: individuals repeat a behavior more if its incentive is uncertain than if it is certain, even when the certain incentive is financially better. This effect is robust; it holds in both lab and field settings and at both small and large magnitudes. Furthermore, the experiments identify two theory-driven boundary conditions for the reinforcing-uncertainty effect: the effect arises (a) only if the uncertainty is resolved immediately and not if the resolution of uncertainty is delayed, and (b) only after, not before, one has engaged in repetitions. These results support a resolution-as-reward account and cast doubt on other explanations such as reference-dependent preferences. This research reveals the hidden value of uncertain incentives and sheds light on the delicate relationship between incentive uncertainty and repetition decisions.

Suggested Citation

  • Luxi Shen & Christopher K Hsee & Joachim H Talloen & Gita V JoharEditor & Amna KirmaniEditor & Stijn M J van Osselaer, 2019. "The Fun and Function of Uncertainty: Uncertain Incentives Reinforce Repetition Decisions," Journal of Consumer Research, Journal of Consumer Research Inc., vol. 46(1), pages 69-81.
  • Handle: RePEc:oup:jconrs:v:46:y:2019:i:1:p:69-81.
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    File URL: http://hdl.handle.net/10.1093/jcr/ucy062
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    Citations

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    Cited by:

    1. Iñigo Gallo & Chadwick J Miller & Nasir Haghighi & Thomas D. Gilovich, 2024. "The differential impact of uncertainty on the evaluation of material and experiential purchases," Marketing Letters, Springer, vol. 35(2), pages 187-203, June.
    2. Camilleri, Adrian R. & Dankova, Katarina & Ortiz, Jose M. & Neelim, Ananta, 2023. "Increasing worker motivation using a reward scheme with probabilistic elements," Organizational Behavior and Human Decision Processes, Elsevier, vol. 177(C).
    3. Shi, Haijiao & Chen, Rong & Xu, Xiaobing, 2021. "How reward uncertainty influences subsequent donations: The role of mental accounting," Journal of Business Research, Elsevier, vol. 132(C), pages 383-391.
    4. Aleksandra Kovacheva & Hristina Nikolova, 2024. "Uncertainty marketing tactics: An overview and a unifying framework," Journal of the Academy of Marketing Science, Springer, vol. 52(1), pages 1-22, January.
    5. Tang, Jiansheng & Zhou, Jiamin & Zheng, Chundong & Jiao, Sijing, 2022. "More expectations, more disappointments: Ego depletion in uncertain promotion," Journal of Retailing and Consumer Services, Elsevier, vol. 66(C).
    6. Brice Corgnet & Roberto Hernán González, 2023. "You Will not Regret it: On the Practice of Randomized Incentives," Working Papers 2314, Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon.
    7. Brice Corgnet & Roberto Hernán González, 2023. "On The Appeal Of Complexity," Working Papers 2312, Groupe d'Analyse et de Théorie Economique Lyon St-Étienne (GATE Lyon St-Étienne), Université de Lyon.
    8. Karl Akbari & Udo Wagner, 2021. "Playing When Paying and What Happens Next: Customer Satisfaction and Word-of-Mouth Intention in Gambled Price Promotions," Schmalenbach Journal of Business Research, Springer, vol. 73(2), pages 243-271, June.

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