Content area
Abstract
Numbers are an essential component of many marketing communications. Frequently, these numbers are expressed as percentages. Despite the ubiquity of percentage information in the marketplace, previous research has shown that individual consumers may have difficulty processing such information. Particularly when evaluating the net impact of a series of percentage changes, this dissertation predicts the presence of a systematic error that occurs because of the inappropriate use of whole number computational strategies. Specifically, it is predicted that the use of whole number strategies will lead to a sum-up error in processing sequential percentage changes. The first study empirically established the existence of the error and its marketing consequences in a Web-based experiment.
To better understand the nature of the sum-up error, two different reasons for the use of the sum-up strategy, i.e., lack of numerical ability and lack of motivation, are distinguished. Following the expertise literature, it is predicted that when people are not motivated to calculate the exact answer, people with low numerical ability will make computational errors, and people with high numerical ability may use the sum-up as a heuristic; as a result their sum-up error may be higher and their accuracy level may be lower than people with moderate numerical ability. When people are motivated to calculate the exact answer, however, the sum-up error should decrease and accuracy should increase monotonically with expertise. Study Two measured people's ability and motivation to calculate the exact answer, and obtained supportive evidence for the expertise-based predictions.
This research will contribute theoretically to the burgeoning literature on consumer information miscomprehension. The theory and results are pertinent to a variety of settings where quantitative information is provided. Clearly, marketers may benefit through presenting their offers in a manner that appears more attractive to their consumers. Consequently, wherever changes in quantitative information are presented, this theory provides a useful means of assessing when and how people may make computational errors and exhibit the sum-up error, and may serve as a guide for providing consumer education and/or enforcing government regulation.
