nomic necessity in marketing theory: the issue of counterfactual conditionals

Nomic Necessity in Marketing Theory: The Issue of Counterfactual Conditionals

John E Gaski University of Notre Dame

INTRODUCTION

The purpose of theory is explanation and, therefore, prediction and con- trol of phenomena. Theory derives the power to explain from its component laws or lawlike statements which posit relationships between general categories of phenomena. When particular cases of such phenomena are related to the applicable theory, they are explained, provided the theory is valid.

For example, in a marketing channels context, it may be theorized that intrachannel conflict is caused by a supplier's use of certain coercive tactics against a distributor, such as price increases or delay of delivery. The lawlike statements being postulated here can be represented as:

Price increase Conflict

Delay of Delivery Conflict

One can then utilize such theoretical propositions to attempt to explain particular circumstances. If the Hypothetical Widget Corporation observes conflict in its distribution system, it may hypothesize as possible causes its pricing and delivery behavior, then test these hypotheses by examination of the facts.

Lawlike statements, obviously, are most potent constituents of the process of scientific understanding, as well as managerial practice. Just as clearly, their proper conceptualization, construction, and utilization are vital for correct theory formulation. For these reasons, exact definition of the char- acteristics of laws and lawlike statements is an indispensable requirement for scientific study. Of these qualities which serve to distinguish lawlike

�9 1985, Academy of Marketing Science, Journal of the Academy of Marketing Science Spring, 1985, Vol. 13, No. 2, 310-320

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statements, one that seems to resist, as well as demand, precise specifica- tion is nomic necessity.

According to accepted descriptions, nomic necessity means that scientific laws are not merely accidental or chance generalizations, but involve relationships which must occur. In other words, a statement qualifies as lawlike when its content implies that "the occurrence of some phenomenon must be associated with some other phenomenon" (Hunt 1976, p. 70). Also, and perhaps more meaningfully, referred to as "nomic universality," this attribute is manifested in the ability of lawlike statements to support counterfactual conditionals. In fact, the power to support counterfactual conditionals is sometimes offered as the proof of nomic necessity (Chisholm 1955; Hunt 1976, p. 71; Rescher 1970, pp. 179-80). This appears to be insufficient. Rather, only a particular type of counterfactual conditional is supported by lawlike generalizations possessed of nomic necessity. The following discussion elaborates this assertion by the use of examples (and discrepancies between them) taken from one of the more familiar Marketing Theory texts (Hunt 1976, 1983). Ultimately, the fundamental pertinence of the counterfactual-support condition is called into question.

THE ANTECEDENT-CONSEQUENT PROBLEM

To illustrate the distinction between lawlike statements and accidental generalizations ascribable to nomic necessity, consider the following examples (from Hunt 1976, p. 70; or 1983, p. 161): 1

(1) All the coins in my pocket are half-dollars.

(2) All products with the trade name "Maxwell House" have a coffee base.

(3) All products produced by Procter and Gamble are distributed through supermarkets.

(4) Two cities attract retail trade from an intermediate town in the vicinity of the breaking point (where 50 percent of the trade is attracted to each city) in direct proportion to their populations and in inverse proportion to the square of the distances from the two cities to the intermediate town.

(5) In any survey, the percentage of people who express intentions to purchase a brand is directly proportional to the square root of the percentage of informants who currently use the brand.

To test for nomic necessity, compare each statement with the related counterfactual conditional from the next set (Hunt 1976; pp. 70-1):

312 NOMIC NECESSITY IN MARKETING THEORY: THE ISSUE OF COUNTERFACTUAL CONDITIONALS

A. If this coin (which is not a half-dollar) were placed in my pocket, it would be a half-dollar.

B. If this product (which does not have a coffee base) were labeled "Maxwell House," then it would have a coffee base.

C. If this automobile were produced by Procter and Gamble (which it is not), it would be distributed through supermarkets.

D. If city K had four times the population of city J (K actually has only twice the population of J), then city K would double the percentage of retail trade it draws from intermediate city I.

E. If the usership of brand X had been 16 per cent (it actually is only 4 per cent), then in this survey, the percentage of people who express an intention to purchase would have doubled.

Hunt asserted that generalizations 1, 2, and 3 are not lawlike because they do not support, or provide reason to believe, conditionals A, B, and C, respectively, in contrast to statements 4 and 5 which can support D and E. (It is assumed that all generalizations are accurate representations of reality.) However, this argument is founded on a rather tendentious selection of counterfactual conditionals. Specifically, in statements A, B, and C it is the actual conclusions which are being refuted:

" . . . not a ha l f -dol lar . . , would be a half-dollar." " . . . this product which does not have a coffee b a s e . . , would have a coffee base." " . . . this automobile (meaning a product not distributed through super- marke t s ) . . , would be distributed through supermarkets."

While in propositions D and E, only the incidental premises and not the conclusions are negated by the facts. To be consistent with the first three counterfactual conditionals, D and E would have to appear as:

D. Two cities (which do n o t attract retail trade from an intermediate town in the vicinity of the breaking point in direct proportion to their populations and in inverse proportion to the square of the distances from the two cities to the intermediate town) will attract retail trade from an intermediate town in the vicinity of the breaking point in direct proportion to their populations and in inverse proportion to the square of the distances from the two cities to the intermediate town.

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E. In any survey (in which the percentage of people who express intentions to purchase a brand is not directly proportional to the square root of the percentage of informants who currently use the brand), the percentage of people who express intentions to purchase a brand will be directly proportional to the square root of the percentage of informants who currently use the brand.

Naturally, generalizations 1, 2, and 3 do not support their accompanying counterfactual conditionals ! It is difficult to conceive of a statement, lawlike or otherwise, which could support such internally contradictory propositions as depicted above, each of which abrogates any possibility of its own veracity. Yet original statements D and E, which are contrary to the facts, can be supported. Perhaps a revision of the first three counterfactual conditionals would provide a more fair and illuminating test of nomic necessity.

Suppose statements A, B, and C are written as: A. If this coin (which is not in my pocket) were placed in my pocket,

it would be a half-dollar. B. If this product (which is not labeled Maxwell House) were labeled

"Maxwell House," then it would have a coffee base. C. If this product were produced by Procter and Gamble (which it is

not), it would be distributed through supermarkets. 2 Now represented are subjunctive counterfactuals which do not contain

parenthetical stipulations revoking the conclusion (more properly, the consequent) of each expression. Knowledge that generalizations l, 2, and 3 are true would still not be adequate to support belief in the revised statements A, B, and C. Therefore, three palpably non-lawlike statements have proved incapable of supporting counterfactual conditionals which are not inherently insupportable. This reinforces the position that lawlike statements can support counterfactual conditionals and accidental generalizations cannot, but it is not conclusive. Consider a further revision:

A. If this coin were a Liberty half-dollar (actually, it is a Franklin half) and were placed in my pocket, it would be a half-dollar.

B. If this product were instant coffee (actually, it is freeze-dried) and were labeled "Maxwell House," then it would have a coffee base.

C. If this product were soap (actually, it is toothpaste) and were produced by Procter and Gamble, it would be distributed through supermarkets.


Although these are, perhaps, .not the most elegant examples, the emer- gent situation is one of counterfactual conditionals which can be supported by the non-lawlike statements 1, 2, and 3 (or even without them) which suggests a possible resolution.

Initially, it was deemed unfair to withhold lawlike status from generalizations 1,2, and 3 solely on the basis of their failure to support conditionals A, B, and C as originally constructed, since even the recognizably lawlike 4 and 5 cannot support conditionals which are not only counterfactual, but intrinsically self-negatory. That is, in cases such as these, the condition contrary to the facts is one which invalidates the central assertion of the statement. And, as demonstrated above, an accidental generalization can be quite consistent with a counterfactual conditional as long as the facts introduced do not countermand the conclusion. In other words, when the consequent of the counterfactual is repudiated by the facts, the statement becomes analytically incompatible with support even by a lawlike generalization. And when the consequent is upheld by facts which reject the antecedent, the counterfactual conditional is capable of being supported by even an accidental generalization.

Affirmation or negation of the consequent automatically aborts the valid- ity of the comparison with any generalization. It is only when the counterfactual consideration is strictly limited to the antecedent that these distortions are avoided, and support or non-support by a particular generalization is a reliable test of nomic necessity. (The reason for this may be related to the fact that, in conditional sentences, the consequent expresses a necessary condition for the antecedent, while the antecedent is sufficient for the consequent; Barker 1965, p. 94.) Rather than designating the power to support counterfactual conditionals as the standard for recognizing lawlike statements, perhaps it would be more precise to require an ability to support hypothetical premises. 3 However, there remain other difficulties with the examples presented thus far concerning their usefulness in identi- fying nomic necessity.

STRUCTURAL PROBLEMS

Consider again the original form and first revision of counterfactual conditionals A, B, and C. Recall that these propositions could not be supported by generalizations l, 2, and 3 even when their counterfactual or hypothetical nature was limited to the antecedent of each conditional. This still cannot be regarded as a legitimate test of nomic necessity due to the logical structure of statements A, B, and C, which is different from that of

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the supported conditionals D and E. Statements D and E were adjudged to be supportable by generalizations 4 and 5, provided the generalizations accurately represent the real world. However, the reason original and revised A, B, and C cannot be supported by 1, 2, and 3, even if the generalizations are known to be true, is primarily a function of the form of the counteffactual conditionals rather than the content of the generalizations. Assuming all the generalizations are true, there is a logical inference from antecedent to consequent in both statements D and E; that is, there is a real connection or dependence of each consequent upon its antecedent. There is no such valid logical sequence (Oesterle 1963, p. 168) in A, B, or C. The consequents do not necessarily follow from their antecedents regardless of the truth content of the associated generalizations. It would be impossible for even lawlike statements to provide sufficient reason to believe such logically invalid conditionals.

To further explore this issue, a closer examination of all the statements may be helpful. First, for simplicity, generalizations 4 and 5 can be reduced to:

(4) If X population and distance, then Y retail trade.

(5) If X usership, then Y intentions to purchase.

Counterfactual conditionals D and E are merely quantitative adjustments of the two respective antecedents with proportional modifications of the consequents. They are particular cases of generalizations 4 and 5. Since 4 and 5 are assumed to be true, statements D and E are analytically true. This description does not apply to the first three sets, however. The same logical relationship, derived from and subsumed in the related accompanying generalizations, is not found in conditionals A, B, and C, original or revised. The hypothetical conditions introduced in these instances remove them from the strictly delimited categories of generalizations 1, 2, and 3. Specifically, it is the introduction of a coin not in the pocket, a product not labeled "Maxwell House," and a product not produced by Procter and Gamble, i.e., elements not covered by the original generalizations, which results in the non-support of the counterfactual conditionals, apart from the logical invalidity rendering them insupportable in general. For statements A, B, and C to be consistent with D and E, they would have to be rede- signed in a manner such as the following:

A. If there were four coins in my pocket (actually, there are two), I would have four half-dollars.

B. If there were four products labeled "Maxwell House" (actually, there are two), all four products would have a coffee base.


C. If there were four hundred products produced by Procter and Gam- ble (actually, there are two hundred), all four hundred products would be distributed through supermarkets.

These are counterfactual conditionals developed from generalizations 1, 2, and 3 the same way D and E are generated from 4 and 5. They are simply quantitative derivations of the antecedent parts of statements 1, 2, and 3, with comparable alterations of each consequent. If the non-lawlike generalizations 1, 2, and 3 are known to be true, there is reason to believe these latest revisions of conditionals A, B, and C are also true. This is another indictment of the appropriateness of the support of counterfactual conditionals as the indicant of nomic necessity. Of course, it is difficult to fabricate counterfactuals which are perfectly analogous to D and E because of the qualitative differences between the two subsets of generalizations (1- 3 vs. 4-5), and this presents another discrepancy.

While generalizations 4 and 5 are of the true lawlike form of the generalized conditional, statements 1, 2, and 3 are not. Although they are conditional propositions of the "all A are B " type, the first three statements are bounded by specific circumstances: a pocket, a label, and a producer, respectively. Conversely, generalization 4 applies to any city, and 5 to any survey Statements 1, 2, and 3 are bounded conditionals resembling research hypotheses or singular statements, referring to particular phenomena; 4 and 5 are statistical (actually, tendency) laws. Therefore, the first three statements have less extension, or are less generalized, than the last two and, along with the property that bounded statements are more easily falsifiable than statistical laws, this may contribute to the relative difficulty of creating conditionals supportable by statements 1, 2, and 3. (Admittedly, the assertion that the Maxwell House and P & G generalizations are bounded is a tenuous one. However, a litmus test for boundedness is whether or not a statement is directly testable, i.e., whether every referent element can be inspected. If this condition applies, as it appears to here, the statement cannot be lawlike.)

Requiring the support of counterfactual conditionals as the ultimate test of nomic necessity may be the wrong approach entirely. The deliberations presented so far merely distinguish between bounded statements and those of unrestricted universal form (Nagel 1961, p. 59); even then, serious irregularities persist. If degree of extension is all nomic necessity means, then the criterion is redundant with other attributes of laws (e.g., extension or generalized conditionality), and this does not begin to address non- accidental, bounded statements. Instead, the critical characteristic in the determination of nomic necessity should be the absence of any accidental

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quality. It has been suggested that nomic necessity involves an "element of must," signifying relationships which must occur, as distinct from chance associations (Hunt 1976, p. 171; Rescher 1970, p. 179). Although this appears to be a graceful way of avoiding an assertion that the essential element of nomic necessity is necessity, it is a useful concept, nevertheless, because it implies the universal applicability within categories of phenomena which elevates lawlike generalizations above accidental generalizations and bounded statements about particular phenomena.

AN ATTEMPTED RESOLUTION

Comparisons between bounded hypothesis-like statements and lawlike generalizations have been the subject of considerable scrutiny up to now, but how are accidental generalizations of sufficiently extended lawlike structure to be identified? Consider another set of generalizations:

(6) All screws are rusty. (7) All coins are half-dollars. (8) All products have a coffee base. (9) All products are distributed through supermarkets.

(10) Two cities attract retail trade from an intermediate town in the vicinity of the breaking point in direct proportion to their relative populations of chimpanzees.

(11) In any survey, the percentage of people who express intentions to purchase a brand is directly proportional to the square root of the percentage of informants who currently own chimpanzees.

Even if statements 6 through 11 would somehow happen to be true, they would have to be regarded as accidental regularities, since there are no discernable reasons why the stated relationships must endure. Rust-free screws, coins other than half-dollars, and non-coffee products which are not sold in supermarkets could be produced. Urban chimpanzee population might be related to retail trade attraction, but only by accident; likewise with purchase intention reports. Lawlike status must be denied these generalizations of lawlike appearance because they are accidental, lacking the "element of must," universal applicability, universal generalizability, or nomic necessity.

Regarding a definitive test of this quality, surely alternative contrafactual conditionals or hypothetical premises could be designed to prove the generalizations either capable, or incapable, of their support. This would only reaffirm the inadequacy of such a criterion as an indicator of nomic necessity. However, if a hypothetical situation can be conceived of which is


contrary to the generalization, still assuming the generalization itself to be true, nomic necessity is absent and the statement is not lawlike. For example, regarding statements 10 and 11 above, even if they have been empiri- cally supported and are considered true, contrary instances can easily be imagined which would destroy the contention of veracity. But if a generalization such as "for every action there is an equal and opposite reaction" is assumed to be true, no such contradictory case can realistically be pro- posed. This may appear remarkably similar to the principle that accidental generalizations are unable to support counterfactual conditionals, but the difference should be clear: Both accidental and lawlike generalizations can support hypothetical premises; only lawlike generalizations support them all. (In the case of statistical laws, an exception is made, of course, in that a specified percentage, rather than all, hypothetical circumstances would be supported.) Obviously, subjective evaluation of theoretical basis is re- quired to distinguish accidental and lawlike generalizations, rather than rigid application of a rule. The process is necessarily subjective and somewhat arbitrary, 4 because to conclusively determine whether a statement is lawlike or accidental would be tantamount to confirming an unbounded generalization, which is a logical impossibility. (This does not refer to any confirmation of the lawlike statement itself, but of the implicit statement, "All X relationships are non-accidental.")

CONCLUSION

The view of nomic necessity presented here is at variance with descriptions of the concept offered elsewhere, but it is consistent with the definition (Hunt 1976, pp. 70-1; Nagel 1961, p. 51; Lambert and Brittan 1970, pp. 37-45). Actually, this interpretation appears to be as closely related to the causality criteria of theoretical support and nonspurious association as the traditional account is to generality and universality of extension. It will not be suggested that nomic necessity is a superfluous concept, but there does appear to be some conceptual overlap, regardless of which version is accepted.

To encapsulate the foregoing discussion, if nomic necessity merely serves to distinguish unrestricted from bounded statements, then it is rather insig- nificant, and if it means a non-accidental "element of must," then the support of counterfactual conditionals is an insufficient identifier. Unfor- tunately, the resolution attempted here is undesirably subjective.

Finally, readers will be aware that it is customary at this point to mention (often perfunctorily) the managerial usefulness of the preceding material.

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In this case, marketing practitioners would surely question any applicability to the mission of selling soap, toothpaste, or widgets. For the record, however, let it be said that better understanding of the components of theory should allow the formulation of better theory, regardless of whether the empirical content is astrophysics, microbiology, or exchange. Better theory, in turn, should enable more viable and useful application of theory. Real- istically, of course, the content of this paper may be several levels removed from marketing practice. But if this discussion makes a contribution, however modest, to the understanding of theory construction, it may also contribute to better theories about the process of marketing and, ultimately, to better strategies derived from them.

FOOTNOTES

~Although drawing from a particular text may be somewhat irregular, since Professor Hunt's editions are widely adopted, serve as good prototypes, and, most importantly, provide necessary examples, they seem to be legitimate material for the purpose at hand. Prior reading of the texts, however, is in no way a requirement for comprehension of this paper, and the content, of course, is of general applicability.

Other prominent marketing theory texts (Zaltman, LeMasters, and Heffring 1982; Zaltman, Pinson, and Angelmar 1973) do not address the nomic necessity and counterfactual conditional issue explicitly.

2Revised statements A and B appear in Hunt (1983), in what amounts to a correction, without explanation, of the original examples.

3Rescher (1970) uses the term "hypothetical force."

~Rescher (1970, pp. 184-95) would seem to allow this in his discussion of lawfulness as imputation and "mind-dependent," though he would object to the use of "arbitrary."

REFERENCES

Barker, Stephen E 1965. The Elements of Logic. New York: McGraw-Hill, Inc. Chisholm, R. 1955. "Law Statements and Counterfactual Inference." Analysis 15, 97-105. Hunt, Shelby D. 1976. Marketing Theory: Conceptual Foundations of Research in Marketing.

Columbus, OH: Grid, Inc. 1983. Marketing Theory: The Philosophy of Marketing Science. Homewood, IL:

Richard D. Irwin, Inc. Lambert, Karel and Gordon G. Brittan, Jr. 1970. An Introduction to the Philosophy of Science.

Englewood Cliffs, NJ: Prentice-Hall, Inc. Nagel, Ernest. 1961. The Structure of Science. New York: Harcourt Brace Jovanovich. Oesterle, John A. 1963. Logic: The Art of Defining and Reasoning. Englewood Cliffs, NJ:

Prentice-Hall, Inc. Rescher, Nicholas. 1970. "Lawfulness as Mind-Dependent" in Essays in Honor of Carl G.

Hempel, Nicholas Rescher (ed.). New York: Humanities Press, 178-97. Zaltman, G., K. LeMasters, and M. Heffring. 1982. Theory Construction in Marketing. New

York: John Wiley & Sons.

320 NOM1C NECESSITY 1N MARKETING THEORY: THE ISSUE OF COUNTERFACTUAL CONDITIONALS

Zaltman, G., C. Pinson, and R. Angelmar. 1973. Metatheory in Consumer Research. New York: Holt, Rinehart & Winston.

ABOUT THE AUTHOR

JOHN E GASKI is Assistant Professor of Marketing at the University of Notre Dame. His degrees include a B.B.A. and M.B.A. from Notre Dame, and an M.S. and Ph.D. from the University of Wisconsin at Madison. His publications have appeared in the Journal of Marketing, Journal of Market- ing Research, Business Horizons, Psychology & Marketing, The Journal of European Economic History, and Social Behavior and Personality, as well as proceedings of the Academy of Marketing Science, American Marketing Association, and Association for Consumer Research.

nomic necessity in marketing theory: the issue of counterfactual conditionals

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