Choice: Assortment Size and No-choice Option. Choice in Laboraory Two-key procedure Concurrent schedules of reinforcement Typically VI-VI Each option.

Choice: Assortment Size and No-choice Option

Choice in Laboraory

• Two-key procedure

• Concurrent schedules of reinforcement

• Typically VI-VI

• Each option associated with separate schedule

• Distribution of time and behaviour

• COD

Choice in Real World

• Many simultaneous options

• Combination of schedules

• Unequal levels of reinforcement

• Bias common

Bias

• Spend more time on one alternative than predicted

• Biological predispositions

• Previous conditioning

• Quality and amount

• Advertising!

Herrnstein’s Basic Matching Law

• B = behaviour• R = rate of reinforcement• A = amount• Q = quality

Self-Control• Conflict between short- and long-term

choices

• Choice between small, immediate reward or larger, delayed reward

Ainslie-Rachlin Theory

long-term benefit short-term benefit Time T1 T2 • Value of reinforcer

decreases as delay b/t choice & getting reinforcer increases

• Choose reinforcer with higher value at the moment of choice

• Ability to change mind; binding decisions

Assortment

• Assortment benefits consumers– Common marketing assumption– From classic economic theories

• Large assortment should offer better match between consumers’ preferences and product offering

• Is large choice really better?

Large Assortment Positives

• Better matching argument– Individual preferences and product

characteristics

• Option value argument– Keeps consumer options open– Flexibility when making purchasing decisions– Anticipation of future variety-seeking behaviour– Perceived freedom of choice

• Reducing uncertainty of choice set– Do options adequately represent all

contingencies available?– Delay in purchasing can occur if consumer

uncertain about alternatives

Large Assortment Negatives

• Increased demand on cognitive resources– May produce weaker preferences for product(s)– Increased effort to evaluate attractiveness of

alternatives

• Consumer confusion– As choices increase, confusion increases, and

no choice may be made

A Common Assumption

• Consumers possess readily available criteria for evaluating choice alternatives

• Main task is to find alternative that best matches criteria

But...

• Consumers regularly make choices when lacking sufficient expertise

• May lack good decision criteria

• Might have to construct criteria before making choice– Information gathering– Choice behaviour

• Easier in smaller assortment

“Perfect” Condition

• Consumer has decision criteria– Preformed preference for a particular

alternative

• If alternative is available, selection doesn’t require detailed evaluation

• But...

Product Ideal Point

• Combination of attributes and attribute values describing ideal choice alternative

Example

• Consumer A:– Familiar with scotch products and has favourite brand,

e.g., Oban (peaty, smoky)

• Consumer B:– Familiar with key attributes describing scotch, and has

ideal combination, but doesn’t know specific brand

• Consumer C:– Familiar with key attributes but lacks favourite brand

and ideal attribute combination

• Consumers A, B, and C differ in availability of ideal point

• A has readily defined ideal point and a specific option corresponding to that point

• B also has ideal point, but no specific option corresponding to it

Decision Process

• A’s decision process will be different from B’s and C’s

• A has a memorized preference for a choice option– Match specific option to ideal point– “Affect referral” strategy– Simply retrieve memorized evaluation without

actively processing attributes

• B and C still have to construct option-specific preferences

Chernev (2003)

• Focuses on scenarios in which consumers face decision problems for which affect referral does not provide a ready solution

• Asking what the impact of assortment size is on choice

Experiment

• Subjects asked to articulate their ideal attribute combination

• Made choice from large (16) or small (4) assortment

• Strength of preference (dependent variable) was operationalized as likelihood of switching to another option

• Stimuli were various chocolate assortments– Chocolate type, cocoa content, flavour, nut

content

• 88 undergraduates

• Dependent variable– Reward of 2 chocolates of same kind selected

in choice task or 2 of the most popular chocolates from the Godiva collection

– Would they stay with choice or switch?• Measures preference strength

Results

• Subjects perceive larger set to offer more variety– But, variety offered not

perceived to be extreme in either direction

• Switching– Ideal point and

assortment size

50%

25%

9%

27%

38%

13%

smallassortment

largeassortment

Ideal point not available

Ideal point available

switc

hing

beh

avio

ur

Additional Experiments

• Articulated/non-articulated ideal state conditions

• Choices from more varied options

• General patterns from exp. 1 hold

General Findings

• Readily formed ideal attribute combinations provide subject with a benchmark for evaluating alternatives in choice set– For these subjects, large assortments less likely

to generate weak preferences

• Subjects lacking ideal point susceptible to cognitive overload with large assortments

Cognitive Dissonance

• Consumer ranks two attributes as equally attractive

• Difficult to trade off these attribute levels– Committed to both attributes– Cognitive dissonance associated with rejecting

either more pronounced

• Lowers consumer’s decision confidence– Increases probability of switching

Conclusions• Consumers without an ideal point

– Complex simultaneous tasks of forming ideal attribute combination and searching for best match

• For large assortment, having ideal point simplifies task

• In small assortment, having strong ideal point may complicate task if no ideal match is available

Example

• Mid 1990s Apple computer– Reduced number of Macintosh sub-brands– Hoped to increase sales by decreasing

consumer confusion

Choice/No-choice

• Desired vs. undesired options– Easy choice

• Several equally desired options– Difficult to choose– Whether or not to choose at all– May lead to choice delay

Real World

• Timing of purchasing decisions

• Rarely fixed or predictable

• Option of not choosing usually available

• Defer-choice options– Seeking more information on alternatives– Searching for new alternatives

Theoretical Approach

• Rational theory of search– No-choice option chosen when none of the

alternatives are attractive or there are benefits to continued searching

• Predecisional processes– Select no-choice to avoid making difficult

trade-offs

Completeness Assumption• Completeness assumption

– Consumers have complete access to choice information and that information processing is costless

• In reality– Consumers rarely have complete information

on all brands• Either unavailable or impossible to process

– Information gathering/processing is very costly• Time, resources, effort, etc.

Preference Assumption• Preference ordering

– Consumer has definitive preference ranking between options

• Determines if one item is as good as another

• In reality– Decisions made not through clearly ranked

preferences but due to forced choice– May narrow choice to the extent that consumer is

unable/incapable of discriminating relative differences– Indecision

No-choice Option

• No-choice selected when– None of the alternatives are attractive– When search may produce better options– Consumer is unaware of full range of potential

alternatives– Research should distinguish between these

conditions

Distinction

• Indifference– Don’t care which option is obtained– Random choice

• Indecision– Not ready to make a choice

Dhar (1997)

• Choice deferral• Expanding choice set by:

– adding new alternatives

– changing decision task for same alternatives

• Role of preference uncertainty on no-choice– Tested predictions regarding purchasing for different

choice sets

– Used verbal protocols to understand decision processes

– Manipulated decision task to change effect size

Results• Expanding choice set size with attractive alternative

– Increases preference for no-choice option

• Adding inferior alternative– Decreases preference for no-choice option

– Shouldn’t have an effect, based on trade-off hypothesis

– Suggests decision to purchase is influenced by need to clearly differentiate between alternatives

• Decreasing differences in attractiveness between alternatives increased preference for no-choice option

Applications• Attractive/unattractive options

– e.g., decision made in-store• Providing instant “special discount”

• Makes alternative less attractive

• Makes choice decision easier

– e.g. Realtors showing several unattractive houses and one attractive house

– e.g., Advertising• Brand compares itself to another, less attractive brand

Delay

• Active decision time (ADT)– Time on info gathering, alternative comparison,

place to purchase, etc.– Doesn’t explain excessive delay in purchase

• Total decision delay time (TDDT)– Total elapsed time between need recognition

and purchase– Includes ADT

• Delay closure

Timing Features

• Temporal “reference point”– Consumers demand higher reward to delay

consumption past this point

• Order of outcomes– Consumers prefer pleasant experience after

unpleasant experience

Greenleaf & Lehmann (1995)

• Interviewed business graduate students

• Reasons for delaying purchase and for delay closure

• Major ($100-200) items

• Delay of at least a month

• Factor analysis of responses

10 Factors in Delay

• Too busy to devote time to decision

• Shopping is unpleasant• Performance and

financial risk• Social and

psychological risk• Need someone else’s

advice or consent

• Gather information• Change in market• Uncertain need• Cannot afford to

purchase• Substitute available at

home

9 Reasons for Delay Closure

• Found time to make decision

• Tired of shopping• Obtained advice or

consent• Decided which

alternative to choose• Price lowered

• Need increase• Justify expenditure• Word of mouth• Good store

Delay Reasons and Attributioncaused byexternal factor

caused byme

Locus ofcausationfor delay

related tomaking decision

not related tomaking decisionRelated to

decision

await marketchange

sub. at home

uncertainneed

needinfo.

perf. & finan. risk

can’tafford

need others’advice

timepressure

shoppingunpleasant

Study Limitations

• Graduate students– May not generalize to other sections of

population

• Some delay reasons omitted because rare– e.g., procedural uncertainty; could be very

significant in some situations (completely unfamiliar product)

Deliberation Process

• Decision making process

• Careful consideration of options– Weighing of alternatives

• Expectation: increased satisfaction with choice

• Reality: sense of making incorrect choice– Attractiveness of unchosen option increased

post-choice

Option Attachment

• Consumer considers decision closely– Selecting between options

• May feel discomfort, not satisfaction, upon choice

• Deliberation makes consumer attached to options before selecting from them– “Prefactual ownership” of options

Carmon, Wertenbroch & Zeelenberg (2003)

• Scenario-based study

• Effects of– Proximity to options– Duration of deliberation– Hedonic vs. utilitarian choices– Prior ownership

Results

• Post-choice loss due to perceived increase in value of non-chosen option– Not a decrease in attractiveness of selected

option

• Longer deliberation --> increased option attachment– Greater exposure to options, more invested– Effects of delay– No choice option to avoid sense of loss