Special Session Summary New Insights in the Construction of Consumer Judgments


Klaus Wertenbroch (1999) ,"Special Session Summary New Insights in the Construction of Consumer Judgments", in E - European Advances in Consumer Research Volume 4, eds. Bernard Dubois, Tina M. Lowrey, and L. J. Shrum, Marc Vanhuele, Provo, UT : Association for Consumer Research, Pages: 267-269.

European Advances in Consumer Research Volume 4, 1999      Pages 267-269



Klaus Wertenbroch, INSEAD, France


Work in psychology and behavioral decision making has long focused on the two fundamental processes underlying human decision making, the judgment of frequencies and probabilities and the evaluation of outcomes. This session brought these two areas of inquir together by addressing one of the shared characteristics of these aspects of consumer behavior, the constructive nature of both judgments and preferences. Research in both areas is based on the notion of bounded rationality due to limited processing capacity, under which consumers make difficult tradeoffs between conflicting pieces of information or attributes. To provide the necessary breadth, the session addressed three specific areas that have recently captured the attention of consumer researchers.

First, consumers who make judgments of the frequencies of events such as sales promotions or shopping trips can rely on retrieving episodic information about these events from memory as well as on retrieving rate-based information (e.g., Menon 1993; Menon, Raghubir, and Schwarz 1995). The accuracy of constructing frequency judgments in memory depends on the cognitive capacity constraints that are operative both at the time of encoding and at the time of retrieval of such frequency-related information. The judgmental process requires consumers to weigh episodic and rate-based information against each other. Second, in evaluating choice options consumers have to trade off conflicting attributes against each other, subject to their information processing constraints. When constructing these tradeoffs is difficult, e.g., when the choice set offers several attractive options none of which easily can be verified as the best, consumers may prefer to postpone choice altogether (e.g., Dhar 1997; Meyer 1997; Tversky and Shafir 1992). Third, consumer choice often involves intertemporal tradeoffs between present and future consequences of consumption. These tradeoffs are particularly difficult to make in the face of impulsive preferences (e.g., Loewenstein 1996; Wertenbroch 1998). For example, consumers might want to purchase an expensive clothing item on impulse, although they know that they should save the money for, say, their child’s college education. In order to keep themselves from giving in to any such temptation, they may self-impose constraints on their liquidity, e.g., by leaving their credit cards at home. Such self-imposition of constraints under which one makes intertemporal choices is another aspect of the constructive nature of consumer judgments.

The three papers in this session all focused on new aspects of these areas of inquiry into the construction of consumer judgments. The first paper (Fitzsimons and Menon) compared the relative accuracy of rate versus episodic recall for both regularly and irregularly occurring behaviors at varying levels of cognitive capacity at both encoding and retrieval. The second paper (Dhar and Simonson) explored the impact of adding a no-choice alternative to a choice set on consumer preferences. The authors proposed that such no-choice option provides a way to resolve difficult choices and decreases the relative share of alternatives that are often chosen when no single alternative has a decisive advantage, e.g., in the context of the attraction and compromise effects. The third and final paper (Wertenbroch, Soman, and Nunes) focused on consumer debt as a dynamic vehicle for balancing rational and hedonic dimensions of consumer choice. It showed that consumers self-impose constraints on their own liquidity in order to avoid overconsumption of hedonic goods.



Gavan J. Fitzsimons, University of Pennsylvania, U.S.A.

Geeta Menon, New York University, U.S.A.

The regularity (i.e., periodicity) of an event is a construct that determines which piece of information is accessible in memory for use at a later point in time in computing a judgment. Previous work (e.g., Menon 1993) has shown that: (a) when an event is perceived to be a regular one, people use rates-of-occurrence to form a judgment; and, (b) in the case of irregular behaviors, people are more likely to use an episoic recall strategy to arrive at a frequency. One of the unanswered questions is whether increased accessibility of these different inputs is a function of the encoding process or the retrieval process.

The authors examined the effects of an individual characteristic, cognitive capacity, its effects on information accessibility and the subsequent use of different strategies (episodic recall vs. estimate), and how it moderates the effects on accuracy. They tested the accessibility argument in a wider domain, by hypothesizing that for low frequency events people will tend to use an episodic recall strategy that will lead to accurate results, just as rate-based estimation leads to more accurate results for high frequency events. Further, they also examined whether the inaccuracies result because of processes used at encoding vs. retrieval.

The authors demonstrated that the cognitive capacity that the person has at encoding will determine the accessibility of various inputs, and the cognitive capacity at retrieval will determine the accuracy of the judgment strategy used. They used two different methodologies: (a) they studied everyday behaviors and used diaries as an objective criterion; (b) they also used a computer simulation to manipulate the accessibility of different pieces of information in memory, and therefore had a completely objective criterion for accuracy. By using diverse methodologies, they provided a strong test of their hypotheses.

In study 1, the authors asked 79 undergraduate students at NYU to maintain diaries of their readership of various magazines. They manipulated cognitive capacity at retrieval by giving (vs. not) them an unrelated task to perform while eliciting behavioral frequencies. Regularity was observed at two levels by a median split on the regularity of magazine readership. They expected that when the behavior is perceived to be a regular one, the manipulation of cognitive capacity should not make a difference to the use of a rate-of-occurrence, or to the accuracy of the response. On the other hand, in the case of an irregular behavior, the manipulation of cognitive capacity should hamper the accuracy of the response.

In study 2, the authors manipulated cognitive capacity at encoding and retrieval. Undergraduate students at Wharton took part in a computerized bidding simulation in which they believed they were competing with other participants for a series of building contracts. The experimenters manipulated the competitive response to their bids to control the regularity of a number of behaviors (e.g., how often they bid on a large job - one that requires more than 20 hours of work; how often they win the bid, etc.). While frequency of the behaviors was identical, the authors manipulated the regularity across conditions. For example, participants either bid on a large job twice a week (Mondays and Thursdays) for five weeks, or ten random times across the five week period. After completion of the bidding tasks participants were asked to recall the number of times a particular behavior occurred and were encouraged to use either a rate-of-occurrence or an episodic recall strategy. In addition, cognitive capacity at encoding and at retrieval was manipulated through a divided attention instruction (participants under divided attention must also perform a digit tracking task). This experiment permitted the authors to compare the relative accuracy of rate versus episodic recall for both regular and irregular behaviors at varying levels of cognitive capacity at both encoding and retrieval. As the experiment was conducted in a computerized setting, accuracy could be objectively determined, and a series of accessibility measures etc. were possible.



Ravi Dhar, Yale University, U.S.A.

Itamar Simonson, Stanford University, U.S.A.

Consumers often face choice among several different alternatives in the marketplace. Several studies have shown that whe forced to choose, consumer preferences are influenced by the choice set under consideration. However, choice studies typically "force" respondents to select one of the presented products, whereas in real life consumers usually have the option of not making a purchase. In fact, choosing not to choose is by far the most frequently selected alternative. Furthermore, recent research suggests the decision not to choose is sensitive to the relationship among the alternatives provided. For example, the tendency to not choose increases when the choice set offers several attractive alternatives but none that can easily be verified as the best.

An implicit assumption in the practice of not including a "no-choice option" is that such an alternative would have taken approximately similar relative shares from the various available alternatives (i.e., consistent with the assumption of IIA), such that the qualitative conclusions are unaffected. However, if this assumption does not hold, then any experimental findings may be systematically biased and lead to incorrect predictions of purchase decisions. For example, if a no-choice option tends to take greater share from an option that is preferred when one is forced to choose, then forced choice experiments will consistently overestimate the relative share of such options. More generally, it suggests that the predictions about consumer choice may not be accurate even if context effects are taken into account if the marketplace resembles one where consumers can and do defer choice.

The authors experimentally examined the impact of adding a no-choice option on consumer preferences. Building on the notion that the deferral option provides a way of resolving difficult choices, they proposed that inclusion of a no-choice option tends to decrease the relative shares of alternatives that are often chosen when no single alternatives has a decisive advantage. They examined this proposition in the context of the attraction (Huber et al. 1982) and compromise (Simonson 1989) effects as well as in choice sets with options that are either "average" on all dimensions or have advantages and disadvantages (Shafir 1993). Specifically, they suggested that a no-choice option decreases the magnitude of the compromise effect and the share of "average" alternatives and increases the magnitude of the attraction effect. They reported the results of four studies, which tested this proposition and discussed the implications of their findings for consumer choice research.



Klaus Wertenbroch, Yale University, U.S.A. and INSEAD, France

Dilip Soman,University of Colorado, U.S.A.

Joseph C. Nunes University of Southern California, U.S.A.

While millions of U.S. households carry an average of $7,000 to $8,000 of revolving credit card debt at exorbitant interest rates, not much is known about the antecedents of consumers’ decisions of whether or not to carry revolving debt from one period to the next. The authors first presented results from two experiments that showed that consumers are more willing to go into debt and carry it longer for utilitarian goods (products whose benefits accrue after consumption and which are consumed for these instrumental purposes) than for hedonic goods (products whose benefits accrue concurrently with consumption and which are consumed for the pleasures inherent in consumption itself). These preferences become more pronounced as total expenditure increases, holding consumption stream length constant across goods.

The authors proposed two possible explanations. First, consumers may try to minimize the time during which they carry debt for hedonic goods because they want consumption to be unencumbered by thoughts of continued payments (cf. Prelec and Loewenstein 1998). The burden of debt detracts from the experiential excitement and ratification provided by hedonic consumption. This conflict does not occur with utilitarian goods, which are not purchased exclusively for their own enjoyment, but for instrumental, secondary purposes. Second, consumers may be exercising self-control by limiting their hedonic purchases to products, which they can afford to pay off within a certain time interval (cf. Wertenbroch 1998). If a loan must be paid off sooner, the liquidity available for future hedonic consumption is reduced by that payment, and as a result consumers will be less likely to engage in additional spending on hedonic goods that they may otherwise be tempted to overconsume.

A third experiment differentiated between these accounts. The authors considered goods that are consumed repeatedly over time, providing an ongoing stream of immediate consequences of consumption (concurrently with consecutive consumption episodes) plus some delayed consequences (more positive for utilitarian than for hedonic goods). The unencumbered consumption hypothesis suggests that consumers’ preferred payment periods decrease, the more hedonic and tempting the immediate consequences are, independent of the valence of the delayed consequences. This ensures that the period during which pleasure from consumption is tainted by the pain of making payments is minimized. The self-control hypothesis, in contrast, suggests that consumers don’t want their total hedonic consumption to get out of control (i.e., to exceed a mental budget for hedonic consumption). So the sooner they may be tempted again after financing a current episode of hedonic consumption, the sooner they force themselves to pay off their current hedonic debt. This decreases their liquidity available for future hedonic purchases and consequently prevents excessive overall hedonic consumption. The results provided evidence of self-management of liquidity constraints and ruled out the unencumbered consumption hypothesis as well as a justification-based alternative explanation. Consumers with a need for self-control exhibit debt aversion as a precommitment not to overconsume.


Dhar, Ravi (1997), "Consumer Preference for a No-Choice Option," Journal of Consumer Research, 24 (September), 215-231.

Huber, Joel, John W. Payne, and Christopher Puto (1982), "Adding Asymmetrically Dominated Alternatives: Violations of Regularity and the Similarity Hypothesis," Journal of Consumer Research, 9, 90-98.

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

Menon, Geeta (1993), "The Effects of Accessibility of Information in Memory on Judgments of Behavioral Frequencies," Journal of Consumer Research, 20 (December), 431-440.

Menon, Geeta, Priya Raghubir, and Norbert Schwarz (1995), "Behavioral Frequency Judgments: An Accessibility-Diagnosticity Framework," Journal of Consumer Research, 22 (September), 212-228.

Meyer, Robert J. (1997), "Search Among Assortments: A Search-Theoretic Analysis of the Effect of Set Complexity on Decisions to Defer Choice," Marketing Letters, 7 (January), 131-143.

Prelec, Dra?en, and George F. Loewenstein (1998), "The Red and the Black: Mental Accounting of Savings and Debt, "Marketing Science, 17 (1) , 4-28.

Shafir, Eldar (1993), "Choosing Versus Rejecting: Why Some Options are Both Better and Worse than Others," Memory and Cognition, 21 (4), 546-556

Simonson, Itamar (1989), "Choice Based on Reason: The Case of Attraction and Comproise Effects," Journal of Consumer Research, 16 (September), 158-174.

Tversky, Amos, and Eldar Shafir (1992), "Choice under Conflict: The Dynamics of Deferred Decision," Psychological Science, 6 (November), 358-361.

Wertenbroch, Klaus (1998), "Consumption Self-Control by Rationing Purchase Quantities of Virtue and Vice," Marketing Science, 17 (4), 317-337.



Klaus Wertenbroch, INSEAD, France


E - European Advances in Consumer Research Volume 4 | 1999

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