Special Session Summary Hedonic Interactions Between Choice and Consumption

Klaus Wertenbroch, INSEAD
[ to cite ]:
Klaus Wertenbroch (2002) ,"Special Session Summary Hedonic Interactions Between Choice and Consumption", in NA - Advances in Consumer Research Volume 29, eds. Susan M. Broniarczyk and Kent Nakamoto, Valdosta, GA : Association for Consumer Research, Pages: 105-107.

Advances in Consumer Research Volume 29, 2002     Pages 105-107

SPECIAL SESSION SUMMARY

HEDONIC INTERACTIONS BETWEEN CHOICE AND CONSUMPTION

Klaus Wertenbroch, INSEAD

The three papers in this session showed from different perspectives that consumer preferences are driven by anticipated hedonic interactions between the choice context and the subsequent consumption experience. These hedonic interactions are independent of assessing which choice option is best when only the characteristics of the options themselves are taken into account in a normative analysis. Simply put, consumers do not just choose what is best but also what makes them feel best. Consumer choice appears strategic in that it is aimed at enhancing the hedonic experience of subsequent consumption. Traditional economic analysis does not address these effects, and empirical research in behavioral decision making has focused on the effect of anticipated regret on consumer choice. However, recent empirical research on intertemporal choice, self-control, and on the evaluation of sequences of events over time suggests that consumers make choices strategically in order to achieve higher-order goals that cannot be accounted for by an analysis of the choice alternatives themselves. These goals include, among others, facilitating the enforcement of preferred consumption plans (e.g., Kivetz and Simonson 2000; Wertenbroch 1998), minimizing the negative hedonic impact of making payments (Prelec and Loewenstein 1998), or creating complementarities between consumption episodes (Dhar and Simonson 1999). Within this context, the set of papers described below presented an important theoretical advancement in the economic and psychological study of consumer choice.

Overview: Each of the three papers presented completed experimental results that addressed different aspects of how consumers make choices strategically in order to boost their hedonic consumption experiences. The first paper (Ariely and Zauberman) explored the notion of "nanve extrapolation" in choices of sequences of outcomes over time. Existing research shows that consumers prefer improving sequences to deteriorating sequences. The authors demonstrated that consumers behave as if they expect trends in these experiences to continue (even when they should not) and that their trend expectations impact their current, moment-by-moment experiences of the sequences. Thus, consumers strategically prefer sequences, whose nanve extrapolation boosts the hedonic quality of their current experiences, leading to a preference for improving sequences. The second paper (Kivetz and Kivetz) showed that consumers employ choice alternatives with high hedonic concreteness (e.g., real or familiar choices as opposed to hypothetical or unfamiliar choices) to achieve mood reulation, that is, the tendency to maintain a current positive mood or improve a current negative mood. In contrast, choice alternatives with low hedonic concreteness do not allow consumers to choose strategically to enhance their hedonic state. Instead, choices under low hedonic concreteness reflect (rather than affect) current hedonic states. The third paper (Dhar and Wertenbroch) examined consumer preferences among choice sets as a function of how these choice sets influence the utility derived from consuming options that are chosen from them. Consumers prefer to make choices from sets whose composition enhances their consumption experience in line with self-control or moral considerations. Such choice set effects on consumption utility are not only at odds with economic analysis, they also represent a new class of context effects in research on consumer decision making. Finally, the discussion leader, Dipankar Chakravarti, provided some behavioral decision-theoretic perspective on the papers. While the phenomena discussed do not fall into mainstream categories of consumer research, they nonetheless address some key fundamentals of consumer choice.

 

"HEDONIC EVALUATIONS: THE ROLE OF NA-VE EXTRAPOLATION"

Dan Ariely, MIT

Gal Zauberman, University of North Carolina

Common experiences such as a bus ride, a meal, and a college course unfold over time through a stream of transient states that may vary in intensity and even in sign from moment to moment. For example, a dental treatment can start by an examination that is not very painful, and progress with an increasingly painful root canal or alternatively progress to a relatively pleasant teeth cleaning. Decision-makers often evaluate the overall goodness or badness of such extended episodes, which they store in memory to assist future decisions or convey to others. Such retrospective evaluations of the goodness or badness of episodes and experiences are an important input into decisions to repeat (or not repeat) past experiences.

A major recent development in research on intertemporal choiceBchoices involving costs and benefits that extend over timeBis the discovery that preferences toward such sequences are much stronger for improving sequences compared to deteriorating sequences. However, the reason why consumers prefer improving sequences is unclear. One possible explanation for this preference could be based on the notion of utility from anticipation (Loewenstein 1987) and nanve extrapolation. The idea of nanve extrapolation is that consumers naturally incorporate into their evaluations the meaning of the way experiences progress over time for the future. Consequently, consumers extrapolate the progression of experiences over time to predict their future state (even if the sequence terminates). The notion of nanve extrapolation is based on two propositions: first, that consumers evaluate the implications of their current state for future states; second, that the anticipation of future states is incorporated into current evaluations. For instance, in the area of pain, consumers who experienced an increasing pattern of pain: (1) would predict that the pain would continue to increase (or remain high); and (2) this prediction, because of its anticipated negativity, would make their actual current experience worse. Note that such integration of future states would be rational and desirable if the task consumers were faced with was a task for which they were asked for such predictions. What is interesting in the nanve extrapolation mechanism is that it is hypothesized to operate even when consumers are asked for retrospective evaluations, explicitly asking them to evaluate only he past.

The results from four experiments supported the nanve extrapolation idea. Experiment 1 showed that when the continuous nature of the experience is reduced, the effects or the trends are reduced. Experiment 2 demonstrated that this is partially due to mind point evaluations that decrease the extrapolation nature of the sequence. Experiment 3 provided a test for the effects of trend extrapolation, by showing that taking the exact same sequence and partitioning it at a local minimum or maximum changed the way the service as a whole was evaluated. Lastly, the results from Experiment 4 provide direct support for nanve extrapolation as a mechanism that underlies the well-documented preference for improvement. Experiment 4 asked subjects to predict the development of future trends under conditions that promote natural extrapolation and under ones that did not. The results showed that indeed nanve extrapolation is higher when the trend is more continuous and lower when the trends of the sequence are less continuous. Thus, the notion of nanve extrapolation seems to capture an important component of the preference for improvement.

 

"THE IMPACT OF HEDONIC CONCRETENESS ON MOOD CONGRUITY VERSUS MOOD REGULATION"

Ran Kivetz, Columbia University

Yifat Kivetz, New York University

One of the most often-cited findings in research on affect is the mood congruency effect. Mood congruency is said to occur when feelings act as a selective attentional filter for incoming stimuli, focusing attention on aspects of the situation that are consistent with the decision maker’s mood (e.g., Bower and Cohen 1982). Mood congruency has been documented in many domains and has been termed a "symmetric mood effect," because the consequences of positive and negative moods are diametrically opposed. However, several studies have found that negative affective states can produce the same kinds of behaviors as those produced by positive states (e.g., Cialdini et al. 1973, Isen et al. 1973). These studies, which generated "asymmetric mood effects," have led to the advancement of a different, more motivational hypothesis regarding the impact of mood on judgement and decision-making (Isen 1987). This hypothesis, termed mood regulation, states that people will self-regulate their feelings by trying to maintain positive affect and repair negative affect.

A key question, then, is what are the moderators and boundary conditions that determine the relative strength of mood congruency versus mood regulation. The present research proposes one such moderator, namely the level of "hedonic concreteness" of the impending decision. More specifically, to enable mood maintenance or repair, a particular decision and its possible outcomes must have subsequent hedonic impact on the decision-maker. Thus, we predict that when a decision has high hedonic concreteness, and therefore has the potential to impact the decision-maker’s subsequent affective state, mood regulation will override mood congruency. However, when a decision has low hedonic concreteness, and is therefore unlikely to influence the decision-maker’s subsequent affective state, mood congruency will emerge.

In one study, we manipulated consumers’ mood by asking them to consider four pairs of "happy" [or "sad"] pictures, indicate which of the two pictures in each pair tells a "happier" or "sadder" story, and explain what they think each picture shows. An additional neutral mood condition was included, in which participants were asked to evaluate unemotional pictures. Next, consumers participated in a (seemingly) unrelated marketing study and were asked to make choices between hedonic luxuries (e.g., a pampering massage) and more utilitarian options (e.g., credit towards grocery bills). In essence, hedonic luxuries are objects of desire that provide positive pleasure, whereas utilitarian necessities are functional objects that relieve an unpleasant and negative state of discomfort (Berry 1994; Scitovsky 1992). Thus, according to mood congruency, positive mood should be more compatible with stimuli that enhance a positive state, namely hedonic luxuries, whereas negative mood should be more compatible with stimuli that alleviate a negative state, namely utilitarian necessities.

To manipulate the level of hedonic concreteness, one group of consumers made hypothetical (lottery) choices, whereas a second group of consumers made real choices, in which consumers could actually receive the prize they chose. Compared to a hypothetical choice, a real choice has greater potential to impact the decision-maker’s subsequent affective state because the consequences of this choice are real.

The results indicated that, when making hypothetical choices, consumers in the positive [negative] mood condition were more [less] likely to choose the hedonic luxury over the utilitarian option than were consumers in the neutral mood condition. By contrast, when making real choices, both consumers in the negative mood condition and consumers in the positive mood condition were more likely to choose the hedonic luxury than were consumers in the neutral mood condition. Thus, consistent with the hedonic concreteness hypothesis, the results indicated that consumers who made a hypothetical choice were influenced by mood congruency, whereas consumers who made a real choice were influenced by mood regulation.

In a second study, hedonic concreteness was manipulated by varying the likelihood of winning a lottery prize. [This study, as well as the studies reported subsequently, employed a mood manipulation procedure identical to the one described earlier.] It is reasonable to assume that the hedonic concreteness of a decision is greater when the consequences of this decision are more likely to materialize (see also Kivetz and Simonson 2001). Thus, the hedonic concreteness hypothesis predicts that when the odds of winning a prize are high, consumers will exhibit mood regulation, whereas when the odds of winning are low, consumers will exhibit mood congruency.

The results supported this hypothesis. In particular, when the chances of winning were relatively high, both consumers in the negative mood condition and consumers in the positive mood condition were more likely to choose the luxury prize (a premier bottle of red wine) over the necessity prize (fuel credit) compared to consumers in the neutral mood condition. However, when the chances of winning were relatively low, consumers in the positive [negative] mood condition were more [less] likely to choose the wine compared to consumers in the neutral mood condition.

In a third study, the level of hedonic concreteness was measured rather than manipulated. Specifically, this study contrasted hiring and firing decisions made by managers as opposed to non-managers. It is reasonable to expect that the concreteness of employment decisions will be higher for managers than for non-managers.

After receiving the mood induction manipulation, participants were asked to decide whether they would hire/fire a job candidate/employee (e.g., a salesperson) described in each of several scenarios. As predicted by the hedonic concreteness hypothesis, non-managers exhibited mood congruency, whereas managers exhibited mood regulation. In particular, compared to non-managers in the neutral mood condition, non-managers in negative [positive] mood were less [more] likely to make positive employment decisions (e.g., hire a job candidate). By contrast, both managers in negative mood and managers in positive mood were more likely to make favorable employment decisions compared to managers in neutral mood.

In addition to the studies described above, the authors employed several process measures, manipulation and demand checks, and additional tests of the impact of hedonic concreteness on mood regulation versus mood congruity. They believe the present researh has theoretical and practical implications for consumer choice between hedonic luxuries and utilitarian necessities as well as for managerial decision making. More importantly, this work should help us better understand the underlying mechanisms of two widely researched and conflicting phenomena.

 

"CHOICE SET EFFECTS ON CONSUMPTION UTILITY"

Ravi Dhar, Yale University

Klaus Wertenbroch, INSEAD

Recent research has argued that consumers self-impose constraints on their own choice behavior to manage the quality of their hedonic experiences over time (e.g., Hoch and Loewenstein 1991; Scitovsky 1992; Wertenbroch and Carmon 1997). For example, research on self-control by precommitment has focused on the hedonic costs of self-imposing constraints on one’s choice sets of tempting options. However, consumers can also derive hedonic benefits from manipulating the choice sets they face. For example, selecting a virtuous but less hedonic option in the presence of a more tempting option may enhance the utility of consuming the virtuous option.

More generally, and in line with this notion, the authors propose that choice sets affect the utility derived from the experience of consuming items that were chosen from these sets. That is, depending on the set of options, from which an item is chosen, the same item might provide different degrees of consumption utility. For example, health-conscious consumers may enjoy ice cream for dessert less when they could have had a more virtuous dessert like a healthy fruit salad instead (because that highlights their overindulgence) than when they chose the ice cream from a menu without healthier options. And they may enjoy fruit salad more when they could have had ice cream (because the contrast makes them feel more virtuous) than when there was only fruit salad. More generally, the authors propose that moderation and restraint are more appealing in the presence (rather than the absence) of more indulgent options. Conversely, indulgence is more pleasant in the absence (rather than the presence) of more virtuous options. This proposition is at odds with traditional economic analysis, according to which alternatives that are present in the choice set but are not chosen cannot affect the utility derived from the chosen alternative (Gul and Pesendorfer 2001). It also goes beyond descriptive research on effects of the choice context on choice (e.g., Bettman, Luce, and Payne 1998) or of the consumption context on choice (Dhar and Simonson 1999). The authors showed that (1) choice sets affect the post-choice utility derived from the consumption experience, and (2) these effects in turn affect consumer preferences for the choice sets themselves. They proposed that these preferences for choice sets derive from self-control problems such as overconsumption and procrastination or from moral conflict.

The authors’ analysis used Wertenbroch’s (1998) distinction between vice and virtue goods, whose consumption entails either more immediate benefits and delayed costs (vices) or more immediate costs and delayed benefits (virtues). In a series of experiments, the authors broadened this distinction by constructing stimuli such that costs and benefits refer not only to those of overconsumption (pleasure versus long-term health effects) but also to the costs and benefits of moral choices (e.g., morally desirable or undesirable activities). In the first experiment, they showed across a number of scenarios that consumers enjoy the consumption of a virtue more when it has been chosen from a choice set that includes both a vice and a virtue, that is, from set {vice, virtue} Conversely, they enjoy the consumption of a vice more when it has been chosen from a singleton choice set {vice} that includes no virtue. For example, subjects predicted that spending Sunday morning helping out in a soup kitchen for the homeless is more rewarding when they could have gone to a champagne brunch instead. At the same time, the champagne brunch is more enjoyable when it is not possible to help out in the soup kitchen. A second experiment moderated this effect by providing subjects with a reason for why they couldn’t choose an available, more virtuous option. In the third experiment, subjects stated a greater willingness to pay for a virtue when it was chosen from set {vice, virtue} than when it as chosen from singleton set {virtue}, yet they stated a greater willingness to pay for a vice when it was chosen from singleton set {vice} than when it was chosen from set {vice, virtue}, although normatively more choice is better than less.

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