Perils of calling a lemon a lemon: transference in communicating past experience

Sivanathan, N, Pettit, N and Kakkar, H (2016) Perils of calling a lemon a lemon: transference in communicating past experience. [Conference proceeding]

Abstract

Transactions among strangers are ripe for fraud. To cope, people collect and distribute reputation information, which can foster trust among strangers and deter fraud. This research demonstrates, however, that recipients of reputation information engage in shallow cognitive associations that assign communicators the very traits that they have communicated about others (Study 1). Further, these poor but potent associations contaminate the communicator’s intrinsic traits (Study 2), with downstream economic costs. The data highlight both the unintended negative consequences and the potential for strategic exploitation by those who communicate reputational information.