University of Pennsylvania ScholarlyCommons Marketing Papers Wharton Faculty Research 2003 The Enhancement Bias in Consumer Decisions to Adopt and Utilize Product Innovations Shenghui Zhao Robert J. Meyer University of Pennsylvania Follow this and additional works at: https://repository.upenn.edu/marketing_papers Part of the Advertising and Promotion Management Commons, Behavioral Economics Commons, Business Intelligence Commons, Cognitive Psychology Commons, Experimental Analysis of Behavior Commons, Management Information Systems Commons, and the Marketing Commons Recommended Citation Zhao, S., & Meyer, R. J. (2003). The Enhancement Bias in Consumer Decisions to Adopt and Utilize Product Innovations. Retrieved from https://repository.upenn.edu/marketing_papers/329 This is an unpublished manscript. This paper is posted at ScholarlyCommons. https://repository.upenn.edu/marketing_papers/329 For more information, please contact
[email protected]. The Enhancement Bias in Consumer Decisions to Adopt and Utilize Product Innovations Abstract The ability of consumers to anticipate the value they will draw from new product generations that expand the capabilities of incumbent goods is explored. Drawing on previous research in affective forecasting, the work explores a hypothesis that consumers will frequently overestimate the benefits they envision drawing from new added product features and underestimate the learning costs required to realize those benefits. This hypothesis is tested using a computer simulation in which subjects are trained to play a Pacman-like arcade game where icons are moved over a screen by different forms of tactile controls. Respondents are then given the option to play a series of games for money with an incumbent game platform or pay to play with an alternative version that offer either expanded (Experiments 1 and 2) or simplified (Experiment 3) sets of controls.