| Memory imperfections may influence consumption decisions. Extant models of memory retrieval in consumer choice (e.g., Mullainathan 2002; Mehta et al., 2004) take a fairly limited view that only considers pure forgetting phenomena. However, as recent research (e.g., Braun 1999, Rusting 1999) shows, a variety of factors may systematically distort what is recalled of a past event. If used as input information, such distorted memories may bias consumer decisions. We draw on prior research to develop a model that incorporates systematic memory distortion phenomena as a function of affective disposition and new marketplace information at the time of judgment. We also postulate how these distortive effects may vary with elapsed time between the event experience and the retrieval episode.;We test the model in an experiment simulating consumers' stock market investment decision. Participants initially receive information regarding a target marketplace event with positive (negative) implications for the performance and price of a focal stock (along with some decoy information). Elapsed time is manipulated using verbal/math problem solving tasks of varying length. Positive and negative affective mind sets are induced using video clips embedding appropriately valenced content. The manipulations are disguised as unrelated studies. Nest, participants receive new marketplace information and are then asked to make investment decisions, predict future stock price, and recall the target information. The overall study design manipulates target event valence (positive/negative), affective mind state (positive/negative), new event valence (positive/negative) and the elapsed time (short/medium/long) in a 2x2x2x3 between participant design.;The findings show evidence of memory decay over time. Target positive (negative) events are recalled as less positive (negative) at the point of judgment. The current (newly available) event also significantly affects the memory retrieval process. Positive current events distort prior event recall as more positive whereas negative current events distorts recall as more negative. Importantly, we demonstrate a significant two-way interaction suggesting that affective disposition influences memory increasingly with passage of time between the event experience and the retrieval episode. We consider the implications of these results and also outline a program of future research in the area. |
