Behavioral research has documented the importance of reference effects in markets where product attributes in the choice set change over time. Empirical research on reference effects has been only on non-durables and therefore has focused on the price attribute, because typically only prices change over time, but other product attributes tend to be stable. But innovation-driven markets see substantial changes in product attributes over time. The authors empirically demonstrate the importance of reference quality (and price) effects in estimating a demand system for the U.S. wireless phone market.
Research Papers
Self-customization is the process by which consumers seek to customize offerings to their own preferences. The authors propose that differences in self-customization procedures potentially influence (i) the product configuration favored, (ii) the degree of decision difficulty in product customization, (iii) the degree of satisfaction with the customized option, and (iv) the degree of willingness to purchase.
The bounded rationality literature has largely focused on demonstrations of violations of rationality (i.e. consistency) in individual decision making and has had little to say about the content of preferences. While researchers concluded that inconsistency implied preferences were constructed, some went so far as to presume that since preferences are constructed, substantive preferences do not exist prior to their revelation. In other words, they extended the findings that individuals do not always know exactly what they want to imply that consumer's do not have any substantive preferences.
Among marketers, there has been a growing trend to employ unusual visual identifiers that have little, if anything, to do with the product. For example, designer clothing is sold with the insignia of an arrow or a crocodile, and ACNielsen reports that 18% (nearly one in five) of the 438 viable table-wine brands introduced in the last three years feature an animal, from a hippo to a frog to a penguin, on the label (see http://www.winelabels.org/ for some unique labels).