Understanding Preference Revision and Concession in Joint Decisions

H. Onur Bodur, Concordia University
Neeraj Arora, University of Wisconsin
Anocha Aribarg, University of Wisconsin
EXTENDED ABSTRACT - In marketing, several papers have studied member influence in the group decision. For example, a number of factors related to the influence of a member in the decision outcome, such as preference intensity, purchase decision stage, decision history are previously studied (Corfman and Lehmann 1987, Beatty and Talpade 1994). To infer the influence exerted by a member, a common approach is to first measure her initial preference and then compare it to the group’s preference as reflected by the decision outcome. If the group’s preference is similar (dissimilar) to her initial preference then she is expected to have exerted a high (low) influence on the decision outcome. Despite the wide acceptance of this approach in literature (Arora and Allenby 1999, Corfman 1991, Corfman and Lehmann 1987) and its accuracy in predicting the decision outcome, it provides little insight about how the joint decision was reached. In this paper, we contend that understanding the process by which a purchase decision is reached is important because it may influence the satisfaction of a group member with the decision.
[ to cite ]:
H. Onur Bodur, Neeraj Arora, and Anocha Aribarg (2002) ,"Understanding Preference Revision and Concession in Joint Decisions", in NA - Advances in Consumer Research Volume 29, eds. Susan M. Broniarczyk and Kent Nakamoto, Valdosta, GA : Association for Consumer Research, Pages: 440-441.

Advances in Consumer Research Volume 29, 2002     Pages 440-441

UNDERSTANDING PREFERENCE REVISION AND CONCESSION IN JOINT DECISIONS

H. Onur Bodur, Concordia University

Neeraj Arora, University of Wisconsin

Anocha Aribarg, University of Wisconsin

EXTENDED ABSTRACT -

In marketing, several papers have studied member influence in the group decision. For example, a number of factors related to the influence of a member in the decision outcome, such as preference intensity, purchase decision stage, decision history are previously studied (Corfman and Lehmann 1987, Beatty and Talpade 1994). To infer the influence exerted by a member, a common approach is to first measure her initial preference and then compare it to the group’s preference as reflected by the decision outcome. If the group’s preference is similar (dissimilar) to her initial preference then she is expected to have exerted a high (low) influence on the decision outcome. Despite the wide acceptance of this approach in literature (Arora and Allenby 1999, Corfman 1991, Corfman and Lehmann 1987) and its accuracy in predicting the decision outcome, it provides little insight about how the joint decision was reached. In this paper, we contend that understanding the process by which a purchase decision is reached is important because it may influence the satisfaction of a group member with the decision.

We focus on two key elements of the decision making process namely, revision and concession. The existence of preference revision is recognized in marketing (Chandrashekaran, Walker, Ward, and Reingen 1996, Menasco and Curry 1989, Rao and Steckel 1991). Consistent with previous research, we propose that a member’s preferences are unlikely to be stationary during the group decision-making process and that she may update her preferences as a result of the exposure to the preferences of other group members during the group discussion.

A member may make a concession in order to reach a joint decision. Following the group discussion, a group member may not share the same preferences with the other member(s). Further, she may give in to the preferences of the other member when the decision is actually made. There is acknowledgement of such accommodative behavior in previous research (Davis 1976, Pollay 1968). The elements of revision and concession are not mutually exclusive and members may revise and/or make concessions when reaching a joint decision. In this paper, we establish theoretical and empirical link between revision, concesion, and a member’s satisfaction with joint decision. The exposition of members’ preferences and arguments during group decision will result in preference revision (Hall and Watson 1970, Sengupta and Te’eni 1993), which will in turn have an impact on preference concession. We propose that a member’s satisfaction with the joint decision will be related to his own preference concession and the preference concession of the other member (Corfman and Lehmann 1993, Deutsch 1975, Loewenstein, Thompson and Bazerman 1989).

A field study funded by a packaged goods company was designed and implemented to provide a rigorous test of the proposed hypotheses. The study involved the purchase of a frequently purchased sweet snack. One hundred and seventeen parent teenager dyads participated in the study. We adopted a general framework of the group decision process to investigate revision and concession. In this framework, the group decision process was divided into sequential stages (pre-discussion, group discussion, post-discussion, joint choice, and post-decision). This framework allowed the measurement of revision of members’ preferences and concession made by the members. Both stated and inferred measures were used in the measurement of revision and concession.

We found compelling evidence for the impact of concession on satisfaction. We show that both parents and teenagers are less satisfied with the joint choice when their concession is high. This result was consistent with both stated and inferred measures of concession. More importantly, the impact of concession on satisfaction was moderated by the concession of the other member. A member’s concession, when reciprocated by the other member in the dyad, results in a higher satisfaction with the chosen alternative.

Findings in this paper suggest that whether a member revises her preferences or makes a concession to reach a decision will have a distinct impact on satisfaction with the joint choice. A member will be more satisfied with the joint choice when she has revised her preferences as compared to when she has made a concession to reach a decision. An important implication of the proposed model is that preference revision and concession reciprocity can be viewed as means to increase members’ satisfaction with the group decision. Managerially, it is important for a seller to increase the satisfaction of all members with the joint decision because of the direct impact of satisfaction on merchandise return, customer retention, and positive word-of-mouth.

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