Understanding through the Eyes of Others: Inferences Regarding Chosen and Forgone Products

Consumers often make inferences by observing the behavior of others in the marketplace. These inferences can provide important information for our own judgments (Asch 1956; Yaniv et al 2011) and purchase decisions (Chan and Berger 2012; Wang et al 2012). For example, the market share of smartphone brands indicates the proportion of consumers who choose a certain brand. What, if anything, does such information tell us about users’ preferences for competing options in the market? Most likely, the consumer who has chosen an iPhone perceived more value from that model than others, but by how much? Such inferences are likely to affect our perception of different brands, and may even influence our own consumption choices. To address this issue, our research investigates the inferences that a prospective consumer makes about the evaluations of prior consumers, based on their choices. We show that the degree to which previous consumers are perceived to distinguish between competing options depends on overall choice share and various contextual factors. In a market setting where two options (brands) compete and each is chosen by some consumers, a split in choice share suggests that the two consumer groups favored each option for different reasons. Building on correspondence inference theory (Jones and Davis 1965), we suggest that observers will be differentially impacted when an option is chosen by the majority group vs. the minority group. Because majority judgments tend to be perceived as a better reflection of reality (Nemeth 1986), choice of an option by the majority indicates the likely presence of advantages for which there is widespread agreement. Therefore, we hypothesize that observers will generally assume the majority group to perceive greater differences between competing options than the minority group.