New Insights on Consumer Decision Making

Citation:

Michal Ann Strahilevitz (1994) ,"New Insights on Consumer Decision Making", in AP - Asia Pacific Advances in Consumer Research Volume 1, eds. Joseph A. Cote and Siew Meng Leong, Provo, UT : Association for Consumer Research, Pages: 58.

Asia Pacific Advances in Consumer Research Volume 1, 1994      Page 58

NEW INSIGHTS ON CONSUMER DECISION MAKING

Michal Ann Strahilevitz, University of Illinois at Urbana-Champaign

The purpose of this special session was to present recent studies that examine decision making in the context of consumer choice. While each of the papers presented focuses on a unique aspect of consumer decision making, each demonstrates how understanding the decision making processes of consumers can benefit not only theorists, but marketing practitioners as well.

The first paper, by Michal Strahilevitz, George Loewenstein, and Daniel Kahneman, discusses the results of a series of studies which suggest that the value placed on a possession may increase as a function of the amount of time that has elapsed since that object was acquired. Among the issues explored in this piece are the roles that adaptation and attachment play in determining value judgements, as well as the possible existence of "experiential appreciation." The paper concludes with a discussion of marketing implications regarding test runs (you can use it, but you can't take it home), free trial periods (you can take it home, but it is not yours), and money back guarantees (it is yours, but you may return it for a complete refund).

The second paper, by Ravi Dhar and Drazen Prelec, examines the phenomenon of consumer choice among menus. The authors point out that many consumer decisions require an initial selection of a choice set or a "menu" (e.g., a store or a vacation location) from which a few items are subsequently purchased for consumption. In such cases, the general shape of the decision is often determined before the final stage, by the selection of groups of options. The research investigates the effects of both expanding the choice set by adding an inferior alternative, and of varying the degree of decision difficulty within a menu. Possible criteria for determining whether or not to offer flexible menus are among the managerial issues discussed in this paper.

The final paper, by Fred Heath, focuses on the strategies which consumers use to justify their purchases to themselves. The research builds on previous work which suggests that consumers set budgets for classes of expenses and then monitor their expenditures against the appropriate budget(s). The author discusses how individual decision makers can use categorical reframing to justify desired but unusual expenditures (e.g., an expensive dinner can be assigned to the food budget, to the entertainment budget, or to some combination of the two). The results of this research suggest that by helping consumers to justify certain decisions, marketers can influence both the choices that are made and the satisfaction that results from those choices.

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