Special Session Summary the Negative Effect of Thinking on Consumer Choice

Citation:

Itamar Simonson (2002) ,"Special Session Summary the Negative Effect of Thinking on Consumer Choice", in AP - Asia Pacific Advances in Consumer Research Volume 5, eds. Ramizwick and Tu Ping, Valdosta, GA : Association for Consumer Research, Pages: 235-237.

Asia Pacific Advances in Consumer Research Volume 5, 2002      Pages 235-237

SPECIAL SESSION SUMMARY

THE NEGATIVE EFFECT OF THINKING ON CONSUMER CHOICE

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

A fundamental assumption regarding consumer decision making is that more superficial decisions tend to lead to inferior, less accurate choices. Conversely, if consumers are willing to think more carefully about the options, then they are likely to make better decisions.

The papers included in this session challenged this assumption. Specifically, the three papers presented investigate situations in which thinking more about one’s choice and the available options makes the consumer more susceptible to decision errors and more likely to regret their choices.

Priester, Dholakia, and Fleming proposed that consumers who think more are more susceptible to a context effect referred to as "background contrast." On the other hand, they suggested that consumers who think about their choices more carefully can more easily correct their decisions and avoid such context effects. Priester et al. presented a series of studies that support these propositions.

The paper presented by Carmon, Wertenbroch, and Zeelenberg argues that consumers who consider carefully several options under consideration are more likely to regret not choosing those options that were rejected. Thus, such consumers are likely to feel worse about their decision, compared to consumers who evaluated options more superficially, without getting attached to options that they ended up not selecting. Carmon et al. presented several studies that support this proposition and examine the underlying process.

The Simonson, Kramer, and Young paper suggests that thinking more about options before choice shifts consumer preferences towards options whose advantages are associated with higher uncertainty. They show that any form of deeper processing of choice alternatives, such as thinking about reasons for choice, involvement, anticipating regret, or ratings of individual options, enhance preferences for options whose advantages are associated with greater uncertainty. In articular, more careful evaluation of options increases the choice share of (a) a high price option that is put out by a better-known brand (an uncertain advantage), and (b) a gamble (relative to a sure outcome) that has a probability of producing favorable result (and uncertain advantage) and a probability of producing an unfavorable outcome.

Together, the three papers made a strong case that, in a variety of situations, thinking more carefully about options has its own biases and may often lead to less effective decisions.

 

"THE ROLE OF THOUGHT IN DECISION BIASES AND BIAS (OVER-) CORRECTION"

Joseph R. Priester, University of Michigan, U.S.A.

Utpal M. Dholakia, University of Michigan, U.S.A.

Monique A. Fleming, University of Michigan, U.S.A.

INTRODUCTION

Thought and decision bias. There exists an emerging collection of divergent research findings that suggest certain decision biases are more likely to occur when decision-makers possess either greater ability or motivation to thoughtfully consider choice alternatives. For example, Dhar, Nowlis, & Sherman (2000) found that the compromise effect (Simonson & Tversky, 1992) is more likely to occur when individuals possess more rather than less time to make a decision. That is, the compromise effect is amplified with increased ability to think. Petty (2001) found that individuals who are intrinsically motivated to think (i.e., high in need for cognition, Cacioppo & Petty, 1982) are more likely to demonstrate decision bias as the result of priming than individuals who are not intrinsically motivated to think. That is, priming biases are amplified with increased motivation to think.

Correction processes in decision biases. In a separate line of research, interest has begun to surface over how individuals react to instructions that make them aware of possible bias. Initial evidence suggests that individuals can correct (i.e., remove bias) decisions, and that under certain conditions, individuals even over-correct (i.e., demonstrate bias in the opposite direction). As an example, Houghton, Kardes, Mathieu and Simonson (1999) showed that the compromise effect can be attenuated when individuals are provided with correction instructions.

Hypotheses. We draw on these findings in order to arrive at two hypotheses concerning the role of thought on decision-making. First, we hypothesize that decisions made under relatively thoughtful conditions are more likely to demonstrate biases than decisions made under relatively non-thoughtful conditions. Second, we hypothesize that correction instructions will have a greater impact under conditions of thoughtful rather than non-thoughtful decision-making conditions.

Background contrast effect. In order to test these hypotheses, we chose to use the background contrast effect, a decision bias closely related to the compromise effect and uncovered by Simonson and Tversky (1992). In short, the background contrast effect hypotheses that the process of making one decision can bias subsequent decisions in a systematic manner. We chose this particular bias because of its potential ubiquity (i.e., individuals are often asked to make a series of choices that are related to each other) and because it has received relatively less attention than the compromise effect.

Experiments One and Two

We investigated the first hypothesis in two experiments. For these experiments, we attempted to operationalize the construct thoughtfulness by strikingly divergent means. In Experiment One, we used an individual difference approach. Specifically, all participants completed the need for cognition scale and were categorized as either high (and thus more likely to thoughtfully consider the choice alternatives) or low (and thus less likely to thoughtfully consider the choice alternatives) in need for cognition. In Experiment Two, we manipulated thoughtful consideration of the choice alternatives by either instructing participants that their responses would be kept separate and were thus very important (thoughtful condition) or that their responses would be pooled with all other participants and were thus unimportant (non-thoughtful condition). We hypothesized that those individuals high in need for cognition (Experiment One) and instructed that their responses mattered (Experiment Two) would be more likely to demonstrate the background contrast effect than those individuals low in need for cognition (Experiment One) and instructed that their responses did not matter (Experiment Two). To test for the background contrast effect, all participants completed materials identical to that reported in Simonson and Tversky (1992).

Results. In Experiment One, the background contrast effect is evident when individuals choose the alternative associated with higher priced tires over 50%. Analyses revealed that, as predicted, individuals high in need for cognition demonstrated the effect to a greater extent (59.8%) than individuals low in need for cognition (50.7), F(1,530)=4.407, p<.05. In Experiment Two, the background contrast effect is evident when individuals choose the alternative associated with higher priced tires over 50% for condition A and less than 50% for condition B. Analyses revealed that, as predicted, the background contrast effect emerged more for individuals in the thoughtful than non-thoughtful conditions F(1,151)=4.42, p<.05. The means for the four conditions are presented in the Figure 1.

FIGURE 1

FIGURE 2

Experiments Three and Four

We investigated the second hypothesis in Experiments Three and Four. In both experiments, we used the background contrast in which the bias is exhibited when individuals choose the higher priced tire alternative greater than 50%. In Experiment Three, we replicated the thoughtful conditions of Experiment Two, and manipulated whether participants were instructed to correct for their first choice (i.e., "make sure that your choice in the current selection process is not influenced by the choice you just made.") or not. In Experiment Four, we manipulated both thoughtfulness and correction.

Results. In Experiment Three, analyses revealed that the correction instruction resulted in individuals over-correcting for the influence of the first choice. In the no correction-instruction condition, participants exhibited the background contrast effect by choosing the higher priced tire 59.4%. In contrast, in the correction condition, participants only chose this alternative 38.6%, F(1, 218)=9.889, p<0.01. Recall that all participants in Experiment Three were run under the thoughtful conditions of Experiment Two. We hypothesized, however, that the correction manipulation should emerge more under thoughtful than non-thoughtful conditions. In Experiment Four, the analyses supported this hypothesis. The correction manipulation led to over-correction under the thoughtful conditions (61.8 % uncorrected versus 38.2% corrected), but had no effect for the non-thoughtful conditions (53.8 % in both conditions), F(1,319)=4.547, p<.05. The means for the four conditions are presented in the Figure 2.

Summary

The present research provides support for the notion that the role of thought is important in understanding when and why both decision biases emerge and how correction processes influence such biases.

 

"POST CHOICE EFFECTS OF PRE-CHOICE ADAPTATION"

Ziv Carmon, Klaus Wertenbroch, INSEAD, France

Marcel Zeelenberg, Tilburg University, The Netherlands

We present a behavioral decision-theoretic view of temporary reaction to choice whereby the decision maker experiences post-decision distress as well as a sense that the forgone option is more attractive than it appeared prior to the choice. A person may shop around for an automobile to buy, investigate several kinds, and finally decide on which to purchase. As soon as the purchase is accomplished, he may well be assailed by a sudden feeling of #Oh, my, what have I done!’ The notion is that pre-choice deliberation processes, such as carefully elaborating on the benefits of different desirable decision alternatives, can lead consumers to adapt to an anticipatory sense of owning these alternatives. When choosing one item over desirable others, the decision maker forfeits that sense of ownership of any non-chosen, or forgone, alternative. The natural focus of decision makers on what is forgone in a transaction can lead them to attribute the unfavorable sensation to increased attractiveness of the non-chosen option. In a series of studies we find consistent support for our ideas. In particular we show that increased adaptation (which in different studies we operationalize in different ways such as the duration of deliberation the proximity of the options and prior ownership) to choice options leads to post-choice distress and to increased attractiveness of the forgone option. We also show that post-choice distress and the attractiveness of the forgone option increase as the perceived loss resulting from selecting a different option increases so does. Finally we show that the decrease in the attractiveness of the non-chosen option significantly reduced when the loss was made less salient. We conclude with a discussion of our results and their implication, limitations of our work and directions for future research.

 

"THE EFFECT OF THINKING ON PREFERENCES FOR UNCERTAIN ADVANTAGES"

Itamar Simonson, Stanford Graduate School of Business, U.S.A.

Thomas Kramer, Stanford Graduate School of Business, U.S.A.

Maia Young, Stanford Graduate School of Business, U.S.A.

When choosing between options, consumers usually compare the advantages (and disadvantages) of each option. Furthermore, in many choices, the advantages of options are associated with different levels of uncertainty. For example, the advantage of a product that has a superior brand name but the same features as another product is often associated with a relatively high uncertainty, because better names are inaccurate indicators of quality. Conversely, an advantage on price (i.e., a lower price) is associated with low uncertainty.

Previous research has investigated the impact of a variety of task and context effects (e.g., involvement, providing reasons for choice, anticipating regret) on preferences from sets of options whose advantages differ in their level of uncertainty. To explain the observed effects, researchers presented theories that accounted for the particular results.

In this research, we propose that any task and context condition effect that causes consumers to think more carefully about their choices will tend to enhance the share of option that is superior on a more uncertain dimension (e.g., brand name). That is, instead of focusing on each manipulation separately, we suggest that there is a common underlying factor that explains a wide variety of effects.

We examine this proposition in the context of two primary choice sets: (a) a set consisting of a high brand equity high price option and a low equity low price option, and (b) a sure gain/loss vs. a gamble involving a certain probability of winning/losing an amount and a probability of winning/losing nothing.

The following are examples of such problems:

Digital Camera

Imagine that you are going to a "Best Buy" store to buy a digital camera. The two camera brands that you are considering, by Sony and Fuji, have similar features, including 1,600 x 1,200 resolution, 4X optical zoom, and 4MB memory.

                    Camera A         Camera B

Brand              Sony                  Fuji

Price               $474                 $319

Which of the two cameras would you buy (A or B)? _____

Bets

Imagine that you need to choose between the options described below.

Option A                         Option B

You get $50 for sure       You have 50% chance to get $300

                                       You have 50% chance to lose $25

Which of the two options would you prefer? ______

We predict that, relative to a control, any form of additional processing will increase the share of the better-known brand that is more expensive and the gamble. These predictions were supported in a series of studies using a variety of seemingly unrelated manipulations, such as anticipating regret, rating of individual options, articulating reasons for choice, involvement, being evaluated, and incidental exposure to choices of others. These findings suggest that, beyond the local explanations offered for each effect, certain options are pre-disposed to gain share from any form of additional processing.

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