Consumer choices under product option framing: Loss aversion principles or sensitivity to price differentials?

The effects of options framing can be theoretically explained by loss aversion principles as well as by potential alternative explanations (e.g., sensitivity to price differentials). This paper examines the interaction effects between option framing and two types of cognitive constraints (availability of cognitive resources and additional redundant product information) on consumer choices for adding or deleting optional product features. In the process, the research attempts to provide empirical support for one theoretical model (e.g., loss aversion principles) versus the other (e.g., sensitivity to price differentials). The results support the hypotheses that consumers choose a higher number of product options when starting from a fully loaded model than from a base model, and that this effect is magnified when consumers make choices under high cognitive constraints. In essence, the results empirically support the theoretical premise of the effects of option framing being driven by loss aversion principles than by diminished sensitivity to price differentials. © 2008 Wiley Periodicals, Inc.     

Determinants of retail patronage: A meta-analytical perspective

The retail patronage idea includes such key concepts as store choice and frequency of visit. In this study, the authors synthesize previous empirical studies through a formal, critical review of retailing literature. The meta-analysis suggests that various predictors (e.g., service, product selection, quality) are strongly related to shoppers’ retail choice, whereas others (e.g., store attitude, store image) are important antecedents of shopping frequency. However, the relationships between the predictors and retail patronage vary according to the study characteristics (e.g., experimental vs. other designs). The authors offer implications for retailing research and practice.     

Paying before consuming: Examining the robustness of consumers’ preference for prepayment

Prior research on consumers’ preference for timing of payment suggests that consumers prefer to prepay for certain kinds of purchases (e.g., vacations) and postpay for others (e.g., washer dryers). This research extends this finding by first comparing preference for timing of payment for products that vary by type (hedonic vs. utilitarian) and durability (nondurable vs. durable) to reveal that it is only hedonic-nondurable products that elicit a preference for prepayment (study 1). The two studies that follow examine the robustness of the prepayment preference by (1) varying the favorability of the transaction (study 2), and, (2) by eliminating the choice of payment timing from the transaction (study 3). Results reveal that the preference for prepayment for hedonic-nondurable goods is robust when transaction characteristics are favorable but shifts when transaction characteristics are unfavorable. Furthermore, when the choice of payment timing is not offered, consumers become indifferent towards when they prefer to pay for hedonic-nondurable products. The implications of these findings for marketers and retailers are discussed.     

How Hand Proximity Impacts Consumer Responses to a Persuasive Communication

This research examines the impact of hand proximity (i.e., proximal or distal) on how consumers process the information contained in an advertisement or on a product Web site. Four studies demonstrate that when hands are proximal to that information (e.g., when using a mobile device to view the information), there is more detail‐oriented processing that results in greater attribute recall and a greater amount of attribute‐related thoughts. When hands are distal to that information (e.g., when using a desktop to view the ad or product Web site), there is more holistic, conceptually oriented processing that results in greater thematic recall and more thoughts about the theme. This research also demonstrates that hand proximity can differentially impact choice and product evaluations. Specifically, when hands are proximal consumers prefer ads communicating detailed product information; when hands are distal consumers prefer ads that focus on a theme. Hand proximity effects are driven by the innate tendency to manipulate or inspect an item. The research has important practical implications, given the ubiquity of both hand‐held devices and computers.     

The effects of loss aversion on trade policy: Theory and evidence

We study the implications of loss aversion for trade policy determination and show how it allows us to explain a number of important and puzzling features of trade policy. Some important questions concerning trade policy are why a disproportionate share of protection goes to declining industries and why trade policy has an anti-trade bias. We show that if individual preferences exhibit sufficient loss aversion, higher protection will be given to sectors in which profitability is declining. We also show that if the coefficient of loss aversion is large enough, there will be an anti-trade bias in trade policy. Using a nonlinear regression procedure, we find support for the model and the estimates of the loss aversion parameters are very close to those obtained by Kahneman and Tversky (Kahneman, D., Tversky, A., 1992. Advances in Prospect Theory: Cumulative Representation of Uncertainty. Journal of Risk and Uncertainty 5, 297-323.) with experimental data. Protection is found to be more responsive to losses than to gains, and the estimates of the coefficient of loss aversion are about 2. We also find evidence of loss aversion in lobby formation.     

Besting the status quo: the effect of abstract versus concrete mindsets on emotional trade-off difficulty and avoidant coping behavior

Building on past emotional trade-off difficulty and construal level research, we investigate the conditions under which consumers engage in avoidant coping behavior to reduce negative emotions that arise from trading off valued attributes (e.g., quality and price). Results from three studies offer evidence that an abstract (vs. concrete) mindset systematically decreases avoidant coping behavior (e.g., the selection of a status quo option) by reducing the intensity of the negative emotion consumers experience. This effect replicates across construal level manipulations and product categories. Thus, in addition to the harmful effects of negative emotions and coping behavior on consumer choice identified in past research, we find that an abstract (vs. concrete) mindset can help consumers make better (i.e., more normative) choices. Together, these findings have implications for marketers of new or unfamiliar products as well as products that are not incumbents or category leaders (i.e., status quo options) when consumers face difficult trade-offs.     

Powerlessness,variety-seeking,and the mediating role of need for autonomy

How does feeling powerless (vs. powerful) affect variety-seeking in retail contexts? Based on the notion that feeling powerless is associated with lower autonomy, and building on studies showing that having a wider choice set enhances autonomy, we predict—consistent with research on compensatory consumption—that low-power consumers (vs. those with high power) will exhibit greater variety-seeking. Findings across nine studies were consistent with this prediction. Further, while all nine studies provide evidence that low-power consumers seek greater variety, three studies (1A, 1B, and 1C) support the prediction that this effect is mediated by need for autonomy and not by any of eight other competing mechanisms, including other-orientation, need for uniqueness, and risk aversion. Studies 2 and 3 explore theoretically and managerially relevant ways, respectively, of reducing the tendency for low (vs. high) power consumers to seek greater variety, while study 4 provides external (real-world) validity for our prediction in retail (i.e., a restaurant) context. The theoretical and managerial implications of our research are discussed.     

Taking care of you and me: How choosing for others impacts self-indulgence within family caregiving relationships

Consumers frequently make choices for family members they take care of or from whom they receive care (e.g., their children or partner), yet marketing research has given little attention to how these other-oriented choices might impact the chooser’s self-indulgence. In this research we consider familial caregiving relationships as a relevant and ubiquitous context of other-oriented choices and identify the role of the chooser (i.e., caregiver versus care-receiver) as an important moderator that determines when virtuous other-oriented choices within caregiving relationships lead to licensing and when they encourage consistent virtuous consumption behaviors.Three studies demonstrate that making virtuous food choices for others affect the chooser’s subsequent self-regulatory behavior in two ways: After making a virtuous choice for a care-receiving other (e.g., a young child), caregivers (e.g., parents) are more likely to license, and thus to subsequently self-indulge (Study 1, 3). In contrast, care-receivers are more likely to act consistently with an initial virtuous choice for the caregiver and thus are less likely to self-indulge (Study 2, 3).Our findings extend research on moral licensing and consistency effects by demonstrating that—within familial caregiving relationships—the degree to which one receives and provides care may determine when choosers engage in licensing and when they act consistently with an initial virtuous other-oriented choice.     

My username is IN! The influence of inward vs. outward wandering usernames on judgments of online seller trustworthiness

Previous research showed that words for which the consonant articulation spots wander from the front of the mouth to the back (e.g., EPOK; inward) are preferred over words with the reversed sequence (e.g., EKOP; outward). In the present research, we extended this effect to judgments of online seller trustworthiness and choice of transaction partners. In seven experiments in the context of the online auction market eBay, we show that the mere use of inward compared to outward usernames increases the level of trustworthiness ascribed to online sellers (Experiments 1A, 1B, 2, 4A, 4B) and the likelihood that a seller is chosen for the economic transaction (Experiment 5). As a boundary condition, this effect is reduced when diagnostic information about the seller's reputation is introduced (Experiment 3). We discuss these results in terms of their practical implications for marketing strategies of online sellers and in terms of their relation to research on interpersonal trust.     

Tasting in 2D: implications of food shape,visual cues,and oral haptic sensory inputs

Marketers often vary the shape and dimensions of food products. But could changing the shape (e.g., molding food into cubes or rectangular prisms) or altering the dimensions (e.g., cutting food into thicker or thinner pieces) have unintended consequences in terms of influencing consumers’ size perceptions, calorie estimates, or desired consumption volume of the food? Research related to visual inputs and the elongation bias would suggest that thicker and cube-shaped foods would be perceived as larger and higher in calories; however, research related to oral haptic sensory inputs (i.e., the way the food feels in the mouth) would suggest that thinner and rectangular shaped foods would be perceived as larger and higher in calories. We test these competing predictions in a series of three experimental studies and find support for the oral haptic-based hypothesis. Conceptual and managerial implications are discussed.     

Consumer power and choice deferral: The role of anticipated regret

This paper examines the influence of social power on consumers' propensity to defer choice. Based on the notion that elevated power reduces regret anticipation—the fear of making a wrong choice—it is proposed that power influences the extent of choice deferral by reducing consumers' susceptibility to anticipated regret. Because of the regret-based mechanism, power can increase or decrease consumers' propensity to defer choice, depending upon the situational factors that are associated with anticipated regret, such as salience of regret, outcome reversibility (e.g., return policy), and locus-of-regret (postponing vs. choosing now). Using different manipulations of power, seven studies provide consistent support for the proposed effects and show that situational factors and marketing strategies can induce, turn off, or even reverse the effect of power on deferral. Theoretical contributions and managerial implications are discussed.     

How Do Social Norms Influence Parents’ Food Choices for Their Children? The Role of Social Comparison and Implicit Self-Theories

Despite the proliferation of healthier side items for children at fast food restaurants, many parents still do not make healthy choices for their children in this setting. The goal of this research is to identify the parents most likely to do so and develop an intervention to nudge these parents toward making healthier choices in retail outlets. Across four field studies conducted in a retail environment (i.e., locations of a fast food restaurant chain), the authors predict and find that parents with a high tendency to engage in social comparison and a malleable view of the self are most likely to conform to the norm in their parental social network. Given that the norm in the population studied is to order a less healthy side item (e.g., fries) versus a healthy side item (e.g., fruit), conforming results in significantly less healthy orders for the children of these individuals. The authors demonstrate that a social norm-based intervention designed to set a new healthy norm in this retail environment succeeded in increasing the overall proportion of parents that chose a healthy side item by over 29% by increasing the choice of healthy sides specifically for these individuals. The authors conclude with a discussion of implications for theory, retail managers, and policy makers.     

The paradox and change of Russian cultural values

Existing studies on Russian culture using the dominant dimensional theory of culture (e.g., Hofstede’s), in general, offer “stereotypical” characterization of that country’s societal culture but fail to capture the dynamics of cultural values that exist in Russian business and society. We argue that this weakness stems from the either/or logic associated with such an approach. We echo the call for improving the quality of cross-cultural research by going beyond Hofstede (Tung & Verbeke, 2010) through studying cultural paradoxes and their embedded contexts (e.g., Osland & Bird, 2000) in historical and contemporary Russia. To this end, we have applied Faure & Fang’s (2008) framework which builds on the holistic, dynamic, and paradoxical Yin Yang thinking to unravel the paradox inherent and changes to Russian cultural values over time. We find that underlying paradoxical values that traditionally coexisted in Russian culture during the Communist regime have been further reinforced as a consequence of Russia’s interactions with the rest of the world. In post-Communist Russia, traditional values have not disappeared; rather, they coexist and interact with new values as a result of cultural learning and knowledge transfer in global economy. We discuss the implications of these findings for future research.     

The Interplay of Information Diagnosticity and Need for Cognitive Closure in Determining Choice Confidence

This research augments efforts to produce a richer understanding of the drivers of choice confidence. It investigates the interplay of a contextual factor that is readily influenced by marketing channel members (i.e., information diagnosticity) and an individual difference variable that alters the nature and extent of information processing (i.e., Need for Cognitive Closure; NFCC). Findings from two experimental studies demonstrate a positive influence of NFCC on choice confidence when information diagnosticity is low, but not when it is high. Furthermore, at high levels of NFCC, the influence of information diagnosticity is fully attenuated such that people with high NFCC derive equivalent choice confidence from information that is high or low in diagnosticity. The NFCC effect appears to operate by undermining the influence of information diagnosticity on perceptions of information adequacy and performance expectations. This research holds implications for marketing communications strategy, targeted marketing practices, and public policy.     

Dine-in or take-out: Modeling millennials’ cooking motivation and choice

Students, in general, get into undesirable eating habits, partly due to the decrease in consumption of unhealthy, prepared food items (e.g., take-out). This research applies a multi-method approach to modeling the motivations behind cooking behavior for this cohort of young-adult consumers. Focus groups are conducted and findings are incorporated into an integrative framework to develop and estimate three quantitative choice models for predicting millennials’ cooking behavior. Data for this analysis are collected from surveys of millennial college students in two large metropolises in the US. Extending previous research, self-fulfillment (i.e., sense of achievement from consuming an activity) is found to positively predict cooking behavior. Cooking skill also has a positive association with the incidence of cooking and eating at home. Furthermore, the adverse effect of time needed to cook diminishes with greater cooking skill. Not conforming to previous literature, social motivation (i.e., motivation to socialize with others) has mixed support, and hedonic motivation (i.e., feeling of pleasure from cooking) is a negative predictor of cooking behavior. We offer first-hand implications for research on cooking as a consumed activity, and develop practical interventions.     

Challenges and opportunities in high-dimensional choice data analyses

Modern businesses routinely capture data on millions of observations across subjects, brand SKUs, time periods, predictor variables, and store locations, thereby generating massive high-dimensional datasets. For example, Netflix has choice data on billions of movies selected, user ratings, and geodemographic characteristics. Similar datasets emerge in retailing with potential use of RFIDs, online auctions (e.g., eBay), social networking sites (e.g., mySpace), product reviews (e.g., ePinion), customer relationship marketing, internet commerce, and mobile marketing. We envision massive databases as four-way VAST matrix arrays of Variables?×?Alternatives?×?Subjects?×?Time where at least one dimension is very large. Predictive choice modeling of such massive databases poses novel computational and modeling issues, and the negligence of academic research to address them will result in a disconnect from the marketing practice and an impoverishment of marketing theory. To address these issues, we discuss and identify the challenges and opportunities for both practicing and academic marketers. Thus, we offer an impetus for advancing research in this nascent area and fostering collaboration across scientific disciplines to improve the practice of marketing in information-rich environment.     

The Relationship between task complexity and information search: The role of self‐efficacy

Prior research suggests the complexity of a product choice task is inversely related to the extent of consumers' external information search. The resource‐matching perspective holds that cognitive effort (e.g., external information search) is greatest when available cognitive resources (e.g., as determined by self‐efficacy) match the cognitive demands of a task (e.g., perceived task complexity). Within a brand‐choice context, the relationship between self‐efficacy and extent of information search appears nonmonotonic. In support of the resource‐matching perspective, consumers conduct the most extensive information search when their self‐efficacy matches perceived task difficulty. © 2007 Wiley Periodicals, Inc.     

Attribute Identities Matter: Subjective Perceptions of Attribute Characteristics

Recent research indicates that attributes vary along multiple dimensions with implications for how trade-offs are resolved during choice. We present an exploratory study of the dimensionality underlying naïve subjects ratings of attributes on the characteristics commonly discussed in the literature on tradeoff resolution and decision difficulty. Factor analysis of attribute characteristic assessments indicates that subjects view decision attributes in a multi-dimensional fashion, including an importance/loss aversion dimension, an emotional potential/protection from tradeoffs dimension, and a cognitive difficulty dimension. These results suggest that a one-dimensional measure of attribute characteristics, such as a standard attribute importance rating, may obscure some factors determining individual responses to attributes during decision processing. However, the results also suggest that developing a relatively succinct set of scales in order to characterize the dimensions along with subjects response to attributes is a viable goal for future research.     

Industry effects and firm effects: No effect is an island

At the heart of business research is the identification and prioritization of the factors that create competitive advantage. Previous studies that decompose observed firm performance into industry and other effects have not considered the higher moments of the performance distribution (i.e., the excess kurtosis), nor estimated the correct null hypothesis level of those effects (i.e., of the industry effect). We address these issues to find that: (1) the industry effect impact on firm performance is likely overstated; and, (2) the interaction between the calculated component firm and industry effects is likely one that includes synergistic effects (i.e., the standard additive model of decomposition is likely mis-specified). We offer a new model, test it, and then discuss the resulting implications.     

Combining Sources of Preference Data for Modeling Complex Decision Processes

We review current state-of-the-art practices for combining preference data from multiple sources and discuss future research possibilities. A central theme is that any one data source (e.g., a scanner panel source) is often insufficient to support tests of complex theories of choice and decision making. Hence, analysts may need to embrace a wider variety of data types and measurement tools than traditionally have been considered in applied decision making and choice research. We discuss the viability of preference-stationarity assumptions usually made when pooling data, as well as random-utility theory-based approaches for combining data sources. We also discuss types of models and data sources likely to be required to make inferences about and estimate models that describe choice dynamics. The latter discussion is speculative insofar as the body of literature on this topic is small.