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Choice: Assortment Size and No-choice Option
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Choice in Laboraory
• Two-key procedure
• Concurrent schedules of reinforcement
• Typically VI-VI
• Each option associated with separate schedule
• Distribution of time and behaviour
• COD
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Choice in Real World
• Many simultaneous options
• Combination of schedules
• Unequal levels of reinforcement
• Bias common
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Bias
• Spend more time on one alternative than predicted
• Biological predispositions
• Previous conditioning
• Quality and amount
• Advertising!
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Herrnstein’s Basic Matching Law
• B = behaviour• R = rate of reinforcement• A = amount• Q = quality
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Self-Control• Conflict between short- and long-term
choices
• Choice between small, immediate reward or larger, delayed reward
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Ainslie-Rachlin Theory
long-term benefit short-term benefit Time T1 T2 • Value of reinforcer
decreases as delay b/t choice & getting reinforcer increases
• Choose reinforcer with higher value at the moment of choice
• Ability to change mind; binding decisions
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Assortment
• Assortment benefits consumers– Common marketing assumption– From classic economic theories
• Large assortment should offer better match between consumers’ preferences and product offering
• Is large choice really better?
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Large Assortment Positives
• Better matching argument– Individual preferences and product
characteristics
• Option value argument– Keeps consumer options open– Flexibility when making purchasing decisions– Anticipation of future variety-seeking behaviour– Perceived freedom of choice
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• Reducing uncertainty of choice set– Do options adequately represent all
contingencies available?– Delay in purchasing can occur if consumer
uncertain about alternatives
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Large Assortment Negatives
• Increased demand on cognitive resources– May produce weaker preferences for product(s)– Increased effort to evaluate attractiveness of
alternatives
• Consumer confusion– As choices increase, confusion increases, and
no choice may be made
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A Common Assumption
• Consumers possess readily available criteria for evaluating choice alternatives
• Main task is to find alternative that best matches criteria
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But...
• Consumers regularly make choices when lacking sufficient expertise
• May lack good decision criteria
• Might have to construct criteria before making choice– Information gathering– Choice behaviour
• Easier in smaller assortment
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“Perfect” Condition
• Consumer has decision criteria– Preformed preference for a particular
alternative
• If alternative is available, selection doesn’t require detailed evaluation
• But...
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Product Ideal Point
• Combination of attributes and attribute values describing ideal choice alternative
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Example
• Consumer A:– Familiar with scotch products and has favourite brand,
e.g., Oban (peaty, smoky)
• Consumer B:– Familiar with key attributes describing scotch, and has
ideal combination, but doesn’t know specific brand
• Consumer C:– Familiar with key attributes but lacks favourite brand
and ideal attribute combination
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• Consumers A, B, and C differ in availability of ideal point
• A has readily defined ideal point and a specific option corresponding to that point
• B also has ideal point, but no specific option corresponding to it
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Decision Process
• A’s decision process will be different from B’s and C’s
• A has a memorized preference for a choice option– Match specific option to ideal point– “Affect referral” strategy– Simply retrieve memorized evaluation without
actively processing attributes
• B and C still have to construct option-specific preferences
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Chernev (2003)
• Focuses on scenarios in which consumers face decision problems for which affect referral does not provide a ready solution
• Asking what the impact of assortment size is on choice
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Experiment
• Subjects asked to articulate their ideal attribute combination
• Made choice from large (16) or small (4) assortment
• Strength of preference (dependent variable) was operationalized as likelihood of switching to another option
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• Stimuli were various chocolate assortments– Chocolate type, cocoa content, flavour, nut
content
• 88 undergraduates
• Dependent variable– Reward of 2 chocolates of same kind selected
in choice task or 2 of the most popular chocolates from the Godiva collection
– Would they stay with choice or switch?• Measures preference strength
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Results
• Subjects perceive larger set to offer more variety– But, variety offered not
perceived to be extreme in either direction
• Switching– Ideal point and
assortment size
50%
25%
9%
27%
38%
13%
smallassortment
largeassortment
Ideal point not available
Ideal point available
switc
hing
beh
avio
ur
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Additional Experiments
• Articulated/non-articulated ideal state conditions
• Choices from more varied options
• General patterns from exp. 1 hold
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General Findings
• Readily formed ideal attribute combinations provide subject with a benchmark for evaluating alternatives in choice set– For these subjects, large assortments less likely
to generate weak preferences
• Subjects lacking ideal point susceptible to cognitive overload with large assortments
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Cognitive Dissonance
• Consumer ranks two attributes as equally attractive
• Difficult to trade off these attribute levels– Committed to both attributes– Cognitive dissonance associated with rejecting
either more pronounced
• Lowers consumer’s decision confidence– Increases probability of switching
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Conclusions• Consumers without an ideal point
– Complex simultaneous tasks of forming ideal attribute combination and searching for best match
• For large assortment, having ideal point simplifies task
• In small assortment, having strong ideal point may complicate task if no ideal match is available
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Example
• Mid 1990s Apple computer– Reduced number of Macintosh sub-brands– Hoped to increase sales by decreasing
consumer confusion
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Choice/No-choice
• Desired vs. undesired options– Easy choice
• Several equally desired options– Difficult to choose– Whether or not to choose at all– May lead to choice delay
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Real World
• Timing of purchasing decisions
• Rarely fixed or predictable
• Option of not choosing usually available
• Defer-choice options– Seeking more information on alternatives– Searching for new alternatives
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Theoretical Approach
• Rational theory of search– No-choice option chosen when none of the
alternatives are attractive or there are benefits to continued searching
• Predecisional processes– Select no-choice to avoid making difficult
trade-offs
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Completeness Assumption• Completeness assumption
– Consumers have complete access to choice information and that information processing is costless
• In reality– Consumers rarely have complete information
on all brands• Either unavailable or impossible to process
– Information gathering/processing is very costly• Time, resources, effort, etc.
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Preference Assumption• Preference ordering
– Consumer has definitive preference ranking between options
• Determines if one item is as good as another
• In reality– Decisions made not through clearly ranked
preferences but due to forced choice– May narrow choice to the extent that consumer is
unable/incapable of discriminating relative differences– Indecision
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No-choice Option
• No-choice selected when– None of the alternatives are attractive– When search may produce better options– Consumer is unaware of full range of potential
alternatives– Research should distinguish between these
conditions
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Distinction
• Indifference– Don’t care which option is obtained– Random choice
• Indecision– Not ready to make a choice
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Dhar (1997)
• Choice deferral• Expanding choice set by:
– adding new alternatives
– changing decision task for same alternatives
• Role of preference uncertainty on no-choice– Tested predictions regarding purchasing for different
choice sets
– Used verbal protocols to understand decision processes
– Manipulated decision task to change effect size
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Results• Expanding choice set size with attractive alternative
– Increases preference for no-choice option
• Adding inferior alternative– Decreases preference for no-choice option
– Shouldn’t have an effect, based on trade-off hypothesis
– Suggests decision to purchase is influenced by need to clearly differentiate between alternatives
• Decreasing differences in attractiveness between alternatives increased preference for no-choice option
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Applications• Attractive/unattractive options
– e.g., decision made in-store• Providing instant “special discount”
• Makes alternative less attractive
• Makes choice decision easier
– e.g. Realtors showing several unattractive houses and one attractive house
– e.g., Advertising• Brand compares itself to another, less attractive brand
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Delay
• Active decision time (ADT)– Time on info gathering, alternative comparison,
place to purchase, etc.– Doesn’t explain excessive delay in purchase
• Total decision delay time (TDDT)– Total elapsed time between need recognition
and purchase– Includes ADT
• Delay closure
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Timing Features
• Temporal “reference point”– Consumers demand higher reward to delay
consumption past this point
• Order of outcomes– Consumers prefer pleasant experience after
unpleasant experience
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Greenleaf & Lehmann (1995)
• Interviewed business graduate students
• Reasons for delaying purchase and for delay closure
• Major ($100-200) items
• Delay of at least a month
• Factor analysis of responses
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10 Factors in Delay
• Too busy to devote time to decision
• Shopping is unpleasant• Performance and
financial risk• Social and
psychological risk• Need someone else’s
advice or consent
• Gather information• Change in market• Uncertain need• Cannot afford to
purchase• Substitute available at
home
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9 Reasons for Delay Closure
• Found time to make decision
• Tired of shopping• Obtained advice or
consent• Decided which
alternative to choose• Price lowered
• Need increase• Justify expenditure• Word of mouth• Good store
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Delay Reasons and Attributioncaused byexternal factor
caused byme
Locus ofcausationfor delay
related tomaking decision
not related tomaking decisionRelated to
decision
await marketchange
sub. at home
uncertainneed
needinfo.
perf. & finan. risk
can’tafford
need others’advice
timepressure
shoppingunpleasant
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Study Limitations
• Graduate students– May not generalize to other sections of
population
• Some delay reasons omitted because rare– e.g., procedural uncertainty; could be very
significant in some situations (completely unfamiliar product)
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Deliberation Process
• Decision making process
• Careful consideration of options– Weighing of alternatives
• Expectation: increased satisfaction with choice
• Reality: sense of making incorrect choice– Attractiveness of unchosen option increased
post-choice
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Option Attachment
• Consumer considers decision closely– Selecting between options
• May feel discomfort, not satisfaction, upon choice
• Deliberation makes consumer attached to options before selecting from them– “Prefactual ownership” of options
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Carmon, Wertenbroch & Zeelenberg (2003)
• Scenario-based study
• Effects of– Proximity to options– Duration of deliberation– Hedonic vs. utilitarian choices– Prior ownership
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Results
• Post-choice loss due to perceived increase in value of non-chosen option– Not a decrease in attractiveness of selected
option
• Longer deliberation --> increased option attachment– Greater exposure to options, more invested– Effects of delay– No choice option to avoid sense of loss