How the internet has (not) changed the influence of prior product experience on the consumption and evaluation of experience goods

This paper analyses the impact of experience on the choice and evaluation of experience products. It focuses on the theory of natural exposure (McPhee, 1963) stating that inexperienced consumers purchase only popular products and that obscure products suffer from, on average, worse evaluations by experienced consumers. Of particular interest is whether modern technology has had an influence on consumer behaviour in these regards.

Using a sample of 150 motion pictures and rating data from 121 users of a social network, consumers are clustered into five experience groups. The influence of these clusters on the consumption and evaluation of movies is analysed using Ordinary Least Squares regressions.

Results show that inexperienced consumers tend to stick with popular products, while experienced individuals watch both popular and obscure films. Yet, a significant trend towards better ratings for popular products could not be found. Thus, McPhee's (1963) theory of natural exposure is only partly corroborated. The advance of modern technology has potentially shifted consumer behaviour to venture into the obscure and find the products they like more often.