Resource title

Why are the inventory estimates of shoppers so biased? A psychophysical model of household inventory estimations (RV of 2004/45/MKT)

Resource image

image for OpenScout resource :: Why are the inventory estimates of shoppers so biased? A psychophysical model of household inventory estimations (RV of 2004/45/MKT)

Resource description

Biases in inventory estimations have important implications for consumers, marketers, and policy makers because they may lead to suboptimal storage, purchase, and consumption decisions. The authors develop a model of inventory estimations, which argues that consumers anchor their estimations on either internal or external reference levels and that the quality of the adjustment deteriorates as inventory deviates from the reference level, but improves as inventory becomes more salient. This model is supported by two laboratory experiments and two field studies involving 29 categories. The four studies show that below-average inventory levels are slightly underestimated, that average inventory levels are accurately estimated, and that above-average inventory levels are strongly underestimated. They also show that estimated inventory predicts category purchase decisions better than actual inventory, and that inventory estimations are less accurate for categories that are bought on impulse, difficult to stockpile, and have a low promotional elasticity.

Resource author

Resource publisher

Resource publish date

Resource language

en

Resource content type

application/pdf

Resource resource URL

http://flora.insead.edu/fichiersti_wp/inseadwp2005/2005-47.pdf

Resource license

Copyright INSEAD. All rights reserved