Overconfidence and Underconfidence in Usage Experience

Abstract

Consumers’ subjective assessment of their knowledge (i.e., knowledge confidence) often does not match their actual knowledge (Alba and Hutchinson 2000). This phenomenon is called knowledge miscalibration. Although previous research investigated the effect of knowledge miscalibration on purchasing decisions (e.g., Alba and Hutchinson 2000; Burson 2007; Kidwell et al. 2008), its role in the usage stage of consumption is little understood. Consumer value as “an interactive, relativistic preference experience” (Holbrook 1996 p.138) reflects consumers’ evaluation of usage. Our aim is to investigate how knowledge miscalibration relates to the dimensions of consumer value. We focused on the four self-oriented dimensions of consumer value in Holbrook’s (1994) framework. Specifically, consumer value is hereby decomposed in efficiency, excellence, play and aesthetics. Furthermore, we conceptualise the relationship between knowledge miscalibration and consumer value separately for overconfidence (i.e., positive knowledge miscalibration) and underconfidence (i.e., negative knowledge miscalibration), as each of these two dimensions of knowledge miscalibration stimulate different behavioural mechanisms. Through a critical review of the psychology and consumer psychology literature, we hypothesise that: H1: The stronger the underconfidence, the higher the perception of efficiency.H2: The stronger the overconfidence, the higher the perception of excellence.H3: The stronger the overconfidence, the higher the perception of play.H4: The stronger the underconfidence, the higher the perception of aesthetics.H5-8: Perceived efficiency (H5), excellence (H6), play (H7) and aesthetics (H8) are positively related to satisfaction.H9: Satisfaction is positively related to post-usage intention. We conducted a study in the context of Amazon online shopping. 184 postgraduate students took part in the survey, with 167 completing it. The survey took around ten minutes and included measures of consumer value, satisfaction, post-usage intention, consumers’ actual knowledge of shopping on Amazon and their knowledge confidence. We measured the dimensions of consumer value with a scale developed by Mathwick et al. (2001) for online shopping experience. Satisfaction was measured by two items adapted from Oliver (1997) and post-usage intention by two items developed by Yi and Gong (2008). Consumers’ actual knowledge, knowledge confidence and knowledge miscalibration were measured by subjective probability method where consumers were provided with True/False questions and then asked to express their confidence in their answers (Alba and Hutchinson, 2000). We tested the hypotheses through structural equation modelling. For overconfident consumers, the model fits the data well (CMIN = 238.7, DF = 172, p =.00; CFI =.943; RMSEA =.067). Perceived aesthetics and excellence are not significantly related to satisfaction, so we fail to corroborate H6 and H8. All other hypotheses are supported (p