Switching behaviour as a function of number of options: How much is too much for consumer choice decisions?

The number of alternatives for consumers in almost all purchase situations is increasing at an extremely rapid pace. Although more choices may have many benefits to the consumers, recent studies on choice overload have found that choosing from large alternatives may lead to negative consequences. Majority of the choice overload research has compared only two groups of small versus large assortment size. In extant literature, there is no clarity as to what are small and large assortment sizes. Assortment size used as small in one study has been used as large in some other studies. Small assortment size varied from 2 to 60 choices and large assortment size from 3 to 300 choices in past studies, and the presence of choice overload has been reported at completely different levels of assortment sizes. This study has used an array of six choice sets from 6 to 36 options as compared to just two groups of small versus large assortment. Switching likelihood of consumers was used to capture the choice overload effect in this study. The probability of consumers switching their earlier choice was plotted as a function of number of options using binary logistic regression. Results showed that probability of switching was almost a linearly increasing function of assortment size from 6 to 36 options. The graph of predicted probabilities from 2 to 300 options showed a sharp increase in switching behaviour initially and subsequent flattening of the curve when options became very large.     

Good fortune but bad luck? Predictable versus unpredictable gains and losses in risky choice

This study examines the effects of two different types of good and bad experiences on risk‐taking preferences: fortune and luck. We define fortune as a relatively stable positive or negative context within which choices are made and luck as a more unpredictable series of better or worse outcomes. With the use of a lottery‐based paradigm, fortune was operationalized as a preponderance of all‐gain or all‐loss two‐outcome option pairs within a larger set of mixed‐outcome control lotteries. Luck was operationalized as the experienced frequency of better versus worse outcomes when playing the lotteries. We predicted that fortune and luck would lead to opposite risk‐taking tendencies within control lotteries. An assimilation effect of fortune was predicted, with risk‐averse preferences for control lotteries when surrounded by good fortune and risk‐seeking preferences when surrounded by bad fortune. In contrast, we expected that high rates of success with good luck would lead to risk‐seeking preferences, whereas low rates of success with bad luck would yield risk‐averse preferences. Our predictions for fortune were confirmed; however, there was no evidence of any effect on risk taking based on experiencing good versus bad luck. Moreover, we observed a striking disconnect between impressions of the experience and risk‐taking behavior. Both identification and attributions of luck and fortune were highly correlated with the number of gain outcomes that participants experienced but were uncorrelated with risk taking. We review these surprising findings considering several prominent theories of risk‐taking behavior, particularly drawing attention to the differential roles of predecisional and postdecisional information in choice.     

STUDIES OF THE RATED FAVORABLENESS OF OFFERS TO GAMBLE

S jöberg , L. Studies of the rated favorableness of offers to gamble. Scand. J. Psychol . 1968, 9, 257–273.—Subjects rated the favorableness of offers to gamble on lotteries and wagers on bipolar graphic scales in 5 experiments. It was found for lotteries that the structure of ratings could be described as an effect of variation in probability plus a multiplicative prize probability interaction. A similar model could be fitted to ratings of wagers, with a main effect due to prizes plus an effect due to losses or a loss-prize interaction.     

Towards Dimensionalizing Warranty Information: The Role of Consumer Costs of Warranty Redemption

Firms routinely offer warranties, often as attempts to differentiate their offerings from those of competitors. Despite this practice common to virtually every consumer durable category, extant research has been inconclusive regarding the effect of warranties on quality judgments. One potential limitation of these prior investigations is the failure to model a key element of a product warranty—consumer‐side transaction costs associated with warranty redemption. In this article, we introduce the role of consumer‐side transaction costs associated with warranty redemption and examine the joint impact of warranty length and warranty redemption costs for brand names of varying strength on consumers’ judgments of product quality. Two experiments show that warranty length signals security but not quality, and that perceived quality increases as consumers’ warranty redemption costs decrease, provided that the warranty length is short. Different dimensions or aspects of warranties have different effects on perceived quality. The implications of the results for understanding conflicting findings in the warranty‐quality literature are discussed.     

Consumer Disclosure and Disclosure Avoidance: A Motivational Framework

In this research, we investigate consumers’ motivations for disclosing personal information to relationship‐seeking marketers. We explore the impact of consumers’ relationship perceptions, the nature of benefits offered by marketers in exchange for requested information, and the type of information requested on consumers’ disclosure willingness, focusing on consumers’ forecasts of 2 types of potential disclosure‐related loss (i.e., loss of privacy and loss of face), which are shown to mediate this decision. The results of an experiment revealed that although participants with relatively deep relationship perceptions were more likely to reveal “privacy‐related” personal information, they were more reluctant to reveal embarrassing information. The findings also suggest that although loyal customers found the exchange of privacy‐related personal information for customized benefit offerings (relative to noncustomized offerings) attractive, the reverse was true for embarrassing information; these participants seemed to find the exchange of customized offerings for this latter type of information unattractive. We discuss the theoretical and practical implications of the findings for consumer researchers and relationship‐seeking marketing practitioners.     

The Aggregated Extremes Effect: Not All Routes to “Balanced” Bundles are Equally Appealing

Prior research establishes that consumers are averse to extreme options, but what does a “moderate” option look like in the context of choices among bundles of items, such as investment portfolios or product assortment packs? We propose that for bundles, two paths to creating risk and reward balance exist: a “bundle‐of‐pure‐moderation” with all moderate‐risk–moderate‐reward (moderate RR) components and a “bundle‐of‐extremes,” composed of equal numbers of extreme high‐risk–high‐reward (high RR) and low‐risk–low‐reward (low RR) components. We show that consumers have stronger preference for the balanced bundle when composed of a bundle‐of‐extremes rather than a bundle‐of‐pure‐moderation, even when equated on expected value, a phenomenon we term “the aggregated extremes effect.” This effect occurs across different choice set configurations and across multiple domains. Additionally, this effect is eliminated among consumers who view the high RR and low RR components as incompatible, as this undermines the perceived attractiveness of the bundle‐of‐extremes. Finally, this effect is also eliminated by exposing consumers to a depiction of potential outcomes, such that consumers can better perceive the risk reduction upside of a bundle‐of‐pure‐moderation.     

Order Preservation of PEST Determined Certainty Equivalents: A Test Based on Lotteries with a Fixed Preference Strength

A major assumption of many utility theories is that preferences over lotteries are monotonic in consequences. Under additional reasonable conditions, this means that the choice certainty equivalent (CE) of a lottery should be substitutable for the lottery, but some empirical evidence has suggested otherwise. So several reasonable conditions need to be studied. They are monotonicity of consequences, order preservation of CEs, and bias in estimates of CEs. This paper addresses the second assumption. To do this an algorithm is devised that generates pairs of lotteries with exactly the same preference probability of choice. This permits one to average over both subjects and lotteries. With a sample size of 102, there was no evidence that order preservation of CEs is violated.     

Do Unto Others?

Despite a widespread acknowledgement of the relationship between account offerings and facework, little research has provided evidence showing that different types of accounting moves actually foster diverse assessments of attentiveness to face. Following Goffman (1955, 1967), we coded the primary types of challenges, offerings, and evaluations from interactions between friends who discussed a previous failure event by the speaker. We analyzed the codes—and the complexity of the sequences—for differences in participants’ judgments of attentiveness toward other‐face. Not every accounting form resulted in significant differences; nevertheless, either the speakers or their partners perceived most forms differently in some way. Additionally, elicitors viewed more complex (i.e., longer) account sequences as less attentive to their own negative face, but accounters viewed more complex (i.e., more varied) offerings as more attentive to others’ negative face. Qualitative analyses revealed additional discourse forms that may count as offerings and evaluations, including a more direct form of self‐oriented facework, requests for advice from the accounter, rejections of account suggestions, and requests for information and acceptance.     

Perspectives on the Fairness of Lotteries

When there are equally strong claimants for a scarce good, lotteries are often argued to be a fair method of allocation. This paper reproduces four of the views on the fairness of lotteries that have been presented in the literature: the distributive view; the preference view; the actual consent view; and the expressive view. It argues that these four views cannot offer plausible explanations for the fairness of lotteries. The distributive view is argued to be inadequate because, even though receiving expectations to a good is of value to the participants, this value cannot plausibly make a contribution to the satisfaction of a participant’s claim. Both the preference and actual consent views are argued to be implausible because they lead to accepting procedures as legitimate that fail to correspond with what a claim is. Finally, it is contended that the expressive view identifies a value that is relevant to respecting equal claimants, but that cannot plausibly be related to a procedure’s fairness. The paper concludes by maintaining that an equal treatment view can accept all the valid insights from these four views without needing to accept their untenable implications.     

The Role of Regulatory Focus in the Experience and Self‐Control of Desire for Temptations

This research examines the role of regulatory focus in the experience and control of desire for temptations, the fulfillment of which conflicts with other salient goals of the consumer. Relative to a prevention focus (i.e., an orientation away from negative outcomes), our findings demonstrate that a promotion focus (i.e., an orientation toward positive outcomes) not only increases the intensity of desire experienced on encountering a temptation, but also increases success of its subsequent resistance. Differences in self‐control efficacy are found to be mediated by the type of self‐control strategies consumers use in the 2 foci. Convergent evidence obtained in 4 studies, considering situational and dispositional aspects of regulatory focus, indicates that when temptations are encountered by consumers, regulatory focus is an important determinant of the degree of desire, and the nature and outcome of self‐control.     

When repetitive consumption leads to predictions of faster adaptation

Hedonic adaptation can explain why individuals enjoy their products less over time. One key feature of hedonic adaptation is its dependence on consumption repetition. Our research investigates when the perception of repetitive consumption leads consumers to predict faster hedonic adaptation (i.e., less enjoyment). We conducted four studies testing the impact of repetition on predicted enjoyment (Studies 1A and 1B), the interaction between repetition and assortment variety (Study 2), and the interaction between repetition and attention drawn by the product (Study 3). Results show that repetition leads consumers to predict less future enjoyment, weakens the effect of assortment variety on hedonic adaptation prediction, and strengthens the effect of attention drawn by product on hedonic adaptation prediction. Our results also show that consumers who predict less future enjoyment with a product are less likely to purchase this product. Overall, the findings advance knowledge on hedonic adaptation by presenting the impact of the most relevant feature of hedonic adaptation (i.e., consumption repetition) when it is made salient for consumers, and its interaction with common contextual cues.     

How Power States Influence the Persuasiveness of Top‐Dog versus Underdog Appeals

Although both top‐dog and underdog positioning appeals are widely used in marketing and advertising, little is known about which strategy is more effective in persuading consumers. By introducing a sense of power, a social variable that is inherently relevant to the nature of the top‐dog versus underdog classification, we propose that consumers' responses to these two appeals are influenced by their psychological experience of power. Specifically, low‐power consumers will respond to top‐dog appeals more favorably because associating with top dogs facilitates power restoration. In contrast, high‐power consumers will respond to underdog appeals more favorably because supporting underdogs facilitates power expression. In four experimental studies, we provide consistent support for our main predictions as well as the underlying processes. Studies 1 and 2 demonstrate the differential effect of consumers' power states on their attitudes toward top‐dog versus underdog appeals. Providing process evidence, Studies 3 and 4 identify boundary conditions under which the basic effect was eliminated. These findings contribute to the persuasion literature and power research and provide important implications for positioning strategy and advertisement development.     

选择集大小对网购决策态度和行为的影响

研究探讨网络购物中选择集大小对决策态度和行为的影响,以及目标确定性和产品类型对该关系的调节作用。采用2(大选择集vs.小选择集)×2(目标明确vs.目标不明确)×2(体验型产品vs.搜索型产品)的组间设计,发现大选择集组选择满意度、自信心更高,但延迟选择更多,出现态度-行为分离。目标不明确时,大选择集组延迟选择更多。     

Malleable Mental Accounting: The Effect of Flexibility on the Justification of Attractive Spending and Consumption Decisions

Mental accounts are often characterized as self‐control devices that consumers employ to prevent excess spending and consumption. However, under certain conditions of ambiguity, the mental accounting process is malleable; that is, consumers have flexibility in assigning expenses to different mental accounts. We demonstrate how consumers flexibly classify expenses, or construct accounts, to justify spending. An expense that can be assigned to more than one account (i.e., an ambiguous expense) is more likely to be incurred than an unambiguous expense that is constrained either by existing budgets or by previously constructed accounts. We explore the justification processes that underlie these results and their implications for mental accounts as self‐control devices.     

Substantiating Byzantium: The role of artifacts in the co‐construction of narratives

Acknowledging the abundance of narrative elements in servicescapes and anchored on the premise that consumption experiences are co‐constructed, this research extends existing servicescapes scholarship by theorizing the role of material objects in the co‐construction of narratives at storyscapes, that is, those servicescapes where narratives are at the center stage of the consumption experience. Using a museum exhibition of Byzantine heritage in Thessaloniki, Greece, the findings provide insight on the way in which consumers engage and “read” material artifacts in narrative co‐construction. The emergent framework theorizes consumer participation as narrative substantiation and sheds light on its four constitutive narrative‐construction processes (completing, relating, recontextualizing, and imagining) and on the ways in which consumers anchor these processes on artifact's materiality (artifactual knowledge, practicalness, intermateriality, and realness). Furthermore, this research offers an alternative approach to the existing language analogy according to which objects have their own voice and rhetoric. I see objects, instead, as contributing an evocative engagement according to which consumers unpack objects not only in their reference to the servicescape narrative but also in reference to their own personal and collective lives. Copyright © 2015 John Wiley & Sons, Ltd.     

The effects of source likeability and need for cognition on advertising effectiveness under explicit persuasion

• While there is evidence that an endorser's likeability plays a determining role in the advertising effectiveness of explicit persuasive appeals, this paper examines the impact of the need for cognition (NFC) as a moderator of this relationship. We find that this effect holds, as predicted, for individuals with lower NFC, but not for those with higher NFC. Furthermore, the effects of explicit persuasion and the endorser's likeability on evaluations of products or services by lower‐NFC consumers were found to be mediated by the attribution of self‐interest. In contrast, advertising effectiveness for higher‐NFC consumers was predictable only by the valence of their cognitive responses to the product.

Copyright © 2009 John Wiley & Sons, Ltd.     

Help or hinder? When recommendation signage expands consideration sets and heightens decision difficulty

This research examines whether recommendation signage helps or hinders the consumer when faced with choosing from large product assortments. In spite of frequent usage and retailer intuition suggesting that providing recommendation signs (e.g., “Best Seller,” “Award Winner”) should help consumers in the choice process, we propose that signs can hinder choice for consumers with more developed preferences by adding to the complexity and difficulty of the decision process. In three experiments using horizontally differentiated products in multiple categories, we provide evidence that recommendation signs create preference conflict for consumers with more developed preferences, leading these consumers to form larger consideration sets and ultimately experience more difficulty from the decision-making process. In addition, we show that these effects are mitigated for consumers with less developed preferences and when the choice is from a small assortment. The results suggest that recommendation signage may not be an effective tool for aiding choice from large assortments; instead signage can exacerbate the difficulties associated with having too many choices, with implications on purchase quantity.     

Choosing Between Lotteries: Remarkable Coordination Without Communication

The current research examines tacit coordination behavior in a lottery selection task. Two hundred participants in each of three experiments and 100 in a fourth choose to participate in one of two lotteries, where one lottery has a larger prize than the other. Independent of variations in the complexity of the mechanism of prize allocation, the prize amounts, and whether the lottery is the participant's first or second choice, we typically find that the percentage of participants who choose the high versus low‐prize lotteries does not significantly differ from the equilibrium predictions. This coordination is achieved without communication or experience. We additionally find that participants with an analytical thinking style and a risk‐averse tendency are more likely to choose the low‐prize lottery over the high‐prize lottery. This tendency seems to be stable across choices. The pattern of our results suggests that to achieve tacit coordination, having a subset of individuals who attend to the choices of others is sufficient. Copyright © 2012 John Wiley & Sons, Ltd.     

Category ratio: A search for an optimal solution to reduce choice overload

This paper endeavors to find an optimal solution to alleviate the harmful consequences of choice overload using assortment categorization. Past research on assortment categorization has primarily studied the type of category labels. Only a few studies focused on the number of category labels, and the extant research is inconclusive on the right number of labels. This paper argues that the number of options under each label is more important in reducing choice overload than the number of labels. We call the number of options under each label “category ratio”. We integrate the research from four streams to recommend an optimal range of category ratio. In a field and a lab experiment, we tested the optimal category ratio as an intervention in the reduction of choice overload. The results of both experiments found a significant reduction in choice overload for the optimal category ratio. In experiment 3, we manipulated the category ratio to test whether the optimal category ratio is better than the non-optimal category ratio. The results of experiment 3 found that consumers experienced more satisfaction for the optimal category ratio than both uncategorized assortment and non-optimal category ratio. Past research has found that fewer labels and uninformative categorization are not helpful in the choice process. This paper finds that a few labels are beneficial only when the category ratio is within the proposed optimal range. Uninformative labels also reduced choice overload when categorized using the optimal category ratio.     

Receiving Two Consequences: Tests of Monotonicity and Scale Invariance

The present study investigated two behavioral properties of decision making. Participants were presented two alternatives, each of which yielded two consequences jointly (joint receipt, JR). Monotonicity of JR states that choices remain invariant when the same lottery is adjoined to both of the original alternatives. The data failed to reject monotonicity of JR. Scale invariance states that choices remain invariant under proportionate (scale) changes of the lottery consequences. This property was not rejected for three of four classes of JR lotteries having a common consequence, but it was rejected for two of three classes of binary lotteries and for two of the four classes of general JR lotteries. We conclude that scale invariance does not hold in general. The implication of these findings for utility theory, testing its fundamental assumptions, and determining the functional form of utility is discussed. Copyright 2000 Academic Press.