How Do Stereotypical Representations Affect Judgments of New Product Success? An Empirical Investigation

Storytelling about success is a compelling strategy for communicating a new product's features, both internally to gain the support of key decision makers and externally to gain support for market launch. Yet, new product success stories often lean more toward stereotypes than facts, casting doubt on their accuracy and representativeness. This study examines the accuracy of innovation managers’ judgments about new product success rates when faced with stereotypical information. We specifically explore the influence of the representativeness heuristic, hypothesizing that it leads managers to rely on stereotypical information and potentially results in erroneous judgments. Through two experimental studies, we assess how the valence and amount of information impact judgment accuracy. Our findings indicate that both factors predominantly drive intuitive judgments, which can be less accurate than deliberation. Additionally, we discover that a manager's level of expertise moderates this relationship. Even expert innovation managers, when influenced by stories about potential new product success, tend to disregard factual data about past success rates. These findings offer critical insights into how reliance on stereotypical representations can skew innovation managers’ judgments about new product success.