Special Session Summary Dynamic Aspects of Hedonic Experience: Where Experimental and Interpretive Approaches Meet

Klaus Wertenbroch, Yale University
[ to cite ]:
Klaus Wertenbroch (1998) ,"Special Session Summary Dynamic Aspects of Hedonic Experience: Where Experimental and Interpretive Approaches Meet", in NA - Advances in Consumer Research Volume 25, eds. Joseph W. Alba & J. Wesley Hutchinson, Provo, UT : Association for Consumer Research, Pages: Paage216-218.

Advances in Consumer Research Volume 25, 1998      Paages 216-218

SPECIAL SESSION SUMMARY

DYNAMIC ASPECTS OF HEDONIC EXPERIENCE: WHERE EXPERIMENTAL AND INTERPRETIVE APPROACHES MEET

Klaus Wertenbroch, Yale University

BACKGROUND AND OVERVIEW

The "experiential" or "hedonic" approach to consumer research (Hirschman and Holbrook 1982; Holbrook and Hirschman 1982) has taken a phenomenological and subjective perspective that has traditionally stood in opposition to modern economic approaches to consumer decision making. From that perspective, the emotive, experiential content of a consumption experience is paramount. More recently, behavioral decision researchers have come to a renewed appreciation of the subjective, experiential nature of utility. Daniel Kahneman has suggested a return to Bentham’s definition of utility as the "hedonic significance" of an event i.e., the pleasure or pain associated with it (Kahneman, 1997). This session examined new ways in which consumers impact the hedonic value of their consumption experiences. This question is equally well suited for investigation within behavioral decision theory as well as from an interpretive perspective. Thus, the session attempted to fill a crrent vacuum in consumer research by merging the recent interest in the dynamics of hedonic consumption experiences (e.g., Kahn, Ratner, and Kahneman 1997; Wertenbroch and Carmon 1997) with the well established interpretive paradigm in consumer research.

The three papers in this session focused on different dynamic aspects of hedonic consumer experience and on their impact on the assessment of this experience as well as subsequent behavior. The first paper (Lemon and Wertenbroch) examined consumers’ prospective use of intertemporal self-control mechanisms in an attempt to manage future hedonic utility from service consumption. The second paper (Brown) focused on concurrent experience, looking at consumers’ paradoxical attempts to manipulate choice contexts to increase the immediate pleasure derived from food consumption choices. The third paper (Ariely) examined how consumers form retrospective evaluations of experiences that change in intensity over time. Douglas Holt, the discussant, closed the session by first contrasting the experimental and interpretivist approaches to hedonic consumption and by then providing an interpretivist perspective on the issues examined in the papers.

 

CONSUMER SELF-CONTROL AND THE TWO-PART PRICING OF SERVICES

Kay Lemon, Duke University

Klaus Wertenbroch, Yale University

Why do many health clubs charge yearly membership fees without also charging for each visit to the gym? Why do many video clubs charge their customers for each tape they rent, instead of charging a fixed membership fee? Psychologists and economists have long been interested in how consumers control their time-inconsistent preferences, that is, how they ensure that they do things that are good for them from some overall, or long-term, perspective, but that they are tempted not to do by their immediate impulses (e.g., Ainslie 1975; Loewenstein 1996). One mechanism that consumers use to accomplish such 'virtuous’ behavior is to precommit to it C to strategically manipulate their future incentives now in a way that makes future impulsive behavior too difficult or costly (Thaler and Shefrin 1981; Wertenbroch and Carmon 1997).

The authors examined such strategic consumer behavior in response to usage-sensitive pricing plans in services, in which the total cost paid by consumers has two parts: a fixed component (independent of usage rate) and a variable component (cost per unit consumed). If the service is one which consumers are tempted to underconsume ('virtue’ services such as health clubs), high (sunk) fixed fees operate as a welcome strategic incentive to consume, while variable fees motivate not to consume. In contrast, if the service is one which consumers are tempted to overconsume ('vice’ services such as video clubs), sunk fixed fees mitigate the effect of self-control, while variable per-unit fees impose a strategically desirable constraint on consumption.

In two experiments, the authors examined the effects of need for self-control on customer self-selection into such two-part pricing schemes. The first experiment showed that the consumption norms as opposed to the consumption expectations that were invoked by whether a service category was seen as a vice or virtue determined consumer preferences for alternative two-part pricing schedules. Under a vice frame, consumers exhibited a relative preference for variable per-unit fee pricing that discouraged self-controlling consumers from additional consumption. Under a virtue frame, consumers preferred fixed fee pricing that removed constraints on additional consumption. The second experiment showed that these strategic consumer preferences for two-part pricing schedules influence a firm’s customer acquisition probability. Consumers were more likely to sign up for virtue service, if the fixed-fee component was high, while they wee more likely to sign up for vice service, if the variable-fee component was high.

This work extended previous research on the self-control of time-inconsistent consumer preferences (Wertenbroch 1997) by introducing consumer self-selection into different two-part pricing schedules as a new self-control mechanism for service consumption. Managerially, the authors’ work showed that differential two-part pricing of 'vice’ and 'virtue’ services allows marketers not only to price-discriminate but also to strategically control customer acquisition, satisfaction, and retention (Bolton and Lemon 1997), thus boosting profitability and customer life-time value.

 

PREFERENCE MANAGEMENT: CONSUMER SELF-MANIPULATION OF CONTEXT

Christina L. Brown, New York University

The literature on consumer susceptibility to contextual effects paints a dismal picture of consumers’ abilities to know their own minds to act consistently with their stable preferences and not to be influenced by trivial features of a decision (Tversky and Simonson 1993). Similarly, Hoch and Loewenstein (1991) show that people display "time-inconsistent" preferences involuntary, momentary departures from their long-term preferences, for example when consumers are impatient for a reward. A common presumption of both literatures has been that contextually-dependent choices are "not as legitimate as their more farsighted counterparts" (Hoch and Loewenstein 1991, p. 493). The author suggested a sense in which flexible, time-inconsistent preferences may be adaptive and beneficial (Payne, Bettman and Johnson 1993). In particular, when consumers are able to control the contents of their choice set(s), time-inconsistent preferences allow them to maximize the utility they extract from the environment (West, Brown, and Hoch 1996), by permitting the "experienced" utility of a product to depend on the context in which it is consumed.

To illustrate, imagine two consumers who frequently encounter a single product: Consumer A, completely time-invariant, always rates the product a "6" on a 10-point scale. Consumer B, inconsistent and subject to contextual effects, rates the product anywhere from a "4" to an "8", with a mean of 6. If Consumer B can identify the particular contexts that provide "8" units of experienced utility, and manipulate his/her environment so that such a context occurs, then Consumer B has been able to extract more utility from her environment. Thus, although her expressed preference voluntarily departs from her long-term, stable preferences, it nevertheless generates superior utility. A sequence of such time-inconsistent preferences may generate greater total utility than a similar sequence of time-consistent choices (Kahneman 1997).

One prerequisite for this phenomenon is that a consumer be able to control the environment in which the product is chosen or consumed. Fortunately, this is a reasonably common occurrence in consumer grocery categories. The author used a computer simulation game that allows consumers to "shop" for their choice of frozen entrees, take them home to a simulated "freezer", then make a sequence of choices drawing from this inventory. This simulation showed 1) that consumers’ experienced utility for products is a function of the utility of the non-chosen items in the consideration set, as well as of the unconditioned utility of the product itself; 2) that consumers manipulate their choice set in a way that allows them to experience more utility from their choices, and 3 that consumers who successfully "manage their preferences" in this way accumulate more utility over time than those who do not.

This work provided a conceptual framework suggesting when and how time-inconsistent preferences may be adaptive, although previous research has generally considered them in a negative light. Secondly, Brown provided empirical support for this framework, using a sophisticated interactive methodology, which allows subjects to manipulate their own choice contexts. Finally, the work has managerial and policy implications, since it suggested that the ability to extract more utility from the environment depends in part on the power to manipulate decision context. The relevant policy question is to what extent this power should remain solely in the hands of managers rather than consumers.

 

ON THE MAKING OF AN EXPERIENCE: THE EFFECTS OF BREAKING AND COMBINING EXPERIENCES ON THEIR OVERALL EVALUATION

Dan Ariely, Duke University

How do we create an overall evaluation of experiences that change in intensity over time? What are the "rules" by which decision makers combine the different intensities of such experiences into a single overall evaluation? What factors influence these integration rules? The author examined these questions in the work he presented. He started by demonstrating once again the relationship between the progress of experiences over time and their overall evaluation. In the central part of the paper, the author proposed and tested the idea that the rules for combining such experiences depend on their level of cohesiveness. In other words, he tested whether the evaluation of an experience depends upon whether it is perceived to be single or composed of multiple parts (i.e., discrete or continuous). In two experiments, he demonstrated that the experience’s level of cohesiveness (i.e., segmentation) impacts the relationship between the experience’s pattern and its overall evaluation. The results showed that segmentation substantially reduced the impact patterns have on the overall evaluation, and pulled this evaluation towards the mean intensity. In addition, the author demonstrated that continuously measuring momentary intensities produced a similar effect on this relationship.

 

DISCUSSION

Douglas B. Holt, University of Illinois at Urbana-Champaign

An objective of this session was cross-fertilization between methodologically separate research domains, i.e., to experimentally examine new behavioral problems in hedonic consumption and consider these new insights from an interpretivist perspective. To that end, Holt began by first noting a sharp contrast between interpretivist theory and experimental research. The former is couched in rich, historically and socially determined meaning. The latter, in contrast, aims to abstract away this richness in attempting to uncover universal relationships between variables. Despite this contrast, several connections can be drawn between the papers presented in this sessio and an interpretivist view of the empirical phenomena they studied.

Regarding the Lemon and Wertenbroch paper, for example, Holt suggested that the notion of vice and virtue can be viewed as a socially constructed moral code intended to protect middle class economic and social status. Self-control can thus provide similarly constructed pleasures to consumers. These may range from the satisfaction of self-signaling one’s modesty or virtuousness to the anticipation of the pleasures of excessive consumption after a self-imposed period of frugality. Writers like George Simmel, for example, have noted that pleasure and desire are often induced by distance to the stimulus. Regarding the Brown paper, Holt noted that cultural theory, as embodied by the work of Bourdieu, clashes with the construct of fixed preferences. Preferences are for activities and practices, not for objects. This allows consumers to actively manipulate the utility they derive from consuming these objects, for instance, in ways suggested by Brown’s work.

REFERENCES

Ainslie, George (1975), "Specious Reward: A Behavioral Theory of Impulsiveness and Impulse Control," Psychological Bulletin, 82, 463-496.

Bolton, Ruth N. and Katherine N. Lemon (1997), "A Dynamic Model of Customers’ Usage of Services: Usage as an Antecedent and Consequence of Satisfaction," Working Paper, Fuqua School of Business, Duke University, Durham, NC 27708.

Hirschman, Elizabeth C. and Morris B. Holbrook (1982), "Hedonic Consumption: Emerging Concepts, Methods, and Propositions," Journal of Marketing, 46 (Summer), 92-101.

Hoch, Stephen J. and George F. Loewenstein (1991), "Time-Inconsistent Preferences and Consumer Self-Control," Journal of Consumer Research, 17 (March), 492-507.

Holbrook, Morris B. and Elizabeth C. Hirschman (1982), "The Experiential Aspects of Consumption: Consumer Fantasies, Feelings, and Fun," Journal of Consumer Research, 9 (September), 132-140.

Kahn, Barbara E., Rebecca Ratner, and Daniel Kahneman (1997), "Patterns of Hedonic Consumption Over Time," Marketing Letters, 8 (1), 85-96.

Kahneman, Daniel, "Studies in Experienced Utility," paper presented at New York University, February 21, 1997.

Loewenstein, George F. (1996), "Out of Control: Visceral Influences on Behavior," Organizational Behavior and Human Decision Processes, 3 (March), 272-292.

Payne, John W., James R. Bettman, and Eric J. Johnson (1993), The Adaptive Decision Maker, Cambridge University Press: Cambridge, England.

Thaler, Richard H. and Hersh M. Shefrin (1981), "An Economic Theory of Self-Control," Journal of Political Economy, 89, 392-406.

Tversky, Amos and Itamar Simonson (1993), "Context-Dependent Preferences," Management Science, 39 (October), p. 1179-1189.

West, Patricia M., Christina L. Brown, and Stephen J. Hoch (1996), "Consumption Vocabulary and Preference Formation," Journal of Consumer Research, 23 (September), 120-135.

Wertenbroch, Klaus (1997), Consumption Self-Control via Purchase Quantity Rationing, working paper, Yale School of Management, Box 208200, New Haven, CT 06520.

Wertenbroch, Klaus and Ziv Carmon (1997), "Dynamic Preference Maintenance," Marketing Letters, 8 (1), 145-152.

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