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Abstract

In this article, compromise effects are distinguished theoretically from attraction effects, which have received more research attention in the past. This article proposes and tests expected-loss minimization under decision uncertainty as the underlying mechanism to explain compromise effects. Next, it examines the effects of a consumer's familiarity with the product and attribute-importance structure on compromise effects. The empirical results demonstrate the negative influences of familiarity and asymmetry of attribute importance on compromise effects, as well as the mediating effect of attribute importance on the familiarity–compromise-effect relationship. Further research directions are also discussed. © 2005 Wiley Periodicals, Inc.