Ranked lists are everywhere. If you want to pick out a college, restaurant, hotel, or doctor, chances are there's a Top 10 list that can tell you which ones are the best. According to a new study in the Journal of Consumer Research, moving a mere two spots up or down a ranked list can greatly impact consumer perception.
"We tend to hear people talking about 'Top 10' or 'Top 25' lists," write authors Mathew S. Isaac (Seattle University) and Robert M. Schindler (Rutgers University, Camden). "Our impressions were that there might be an exaggerated difference in how something is perceived when it is on opposite sides of what we call category borders (for example, between 10 and 11 or 25 and 26)."
In a series of experiments, the authors showed study participants ranked lists of consecutively numbered items. They were specifically interested in finding exaggerated differences around these category borders.
As part of their research, the authors obtained data from the Graduate Management Admissions Council. This included almost half a million people who took the GMAT exam over a three-year period. They then matched exam dates with the names of the business schools where the test takers wanted their exam scores sent (this was used as an indication of the schools to which they were applying).
For each of the three years, the researchers recorded each school's rank on the annual U.S. News & World Report list. They found that if a business school's ranking passed a round-number group border (such as rising from number 12 to number 10 or from number 26 to number 24), the rank change was the best predictor of the increase in the number of overall applications to the school.
"An organization whose products and services are subject to third-party ranked lists should invest more aggressively in improving its rank if it is just on the outside looking in to a round-number category. By contrast, a similar rank-increasing effort by an organization that is already ranked number 9 or number 24 might not provide cost-effective results," the authors conclude.
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More information: Mathew S. Isaac and Robert M. Schindler. "The Top-Ten Effect: Consumers' Subjective Categorization of Ranked Lists." Journal of Consumer Research: April 2014.