Uncertainty in consumer decisions

Abstract

Uncertainty has been identified as a major force shaping behaviour.The ubiquity of uncertainty in everyday choices is reflected in its prevalence in economic theories.Despite the acknowledged importance of uncertainty, however, the actual content of the concept is far from clear, for uncertainty has rarely been the focus of research.Presence of uncertainty has been used as a justification for the relevance of the study, rather than the object of the study in and of itself.In this paper, we have studied the presence of uncertainty in consumer decisions.Uncertainty has clearly a multidimensional nature and its dimensions have various effects on consumer behavior.To identify the central dimensions of uncertainty, we have adopted the idea from Herbert Simon who proposed a generalized approach to model a decision making as a process (Simon 1960).We propose that uncertainty has four dimensions in consumer decision context: knowledge uncertainty, evaluation uncertainty, choice uncertainty, and implementation uncertainty.Those dimensions can be clearly identified from our empirical data by using exploratory factor analysis.The questionnaire used in our empirical study can be used to measure uncertainty on each dimension.Against previous wisdom, evaluation and implementation uncertainties seem to exercise stronger impact on consumer decisions than the other varieties of uncertainty in electronic commerce context.

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