Long lists of ranked items, such as Bloomberg Businessweek's rankings of MBA programs, are ubiquitous in Western culture, and they are often used in consumer decision making. Six studies show that consumers mentally subdivide ranked lists into a smaller set of categories and exaggerate differences between consecutive items adjacent to category boundaries. Further, despite prior work suggesting that people might subjectively produce place-value categories (e.g., single digits, the twenties), this research shows that consumers interpret ranked lists by generating round-number categories ending in zero or five (e.g., top 10, top 25). Thus, for example, consumers will more favorably evaluate improvements in rank that cross round-number-category boundaries (e.g., shifting from rank 11 to rank 10) than improvements in rank that cross place-value-category boundaries (e.g., shifting from rank 10 to rank 9). This phenomenon, labeled the top-ten effect, occurs because round numbers are cognitively accessible to consumers due to their prevalent use in everyday communication.
All Science Journal Classification (ASJC) codes
- Business and International Management
- Arts and Humanities (miscellaneous)
- Economics and Econometrics