Lecture 1
What Is Consumer Psychology?
- In general terms, consumer behavior is a psychologically-based study of how individuals make
buying decisions and what motivates them to make a purchase. Several facets of consumer
behavior exist, such as:
o How a consumer feels about certain brands, products, or services
o What motivates a consumer to pick one product over another and why
o What factors in a consumer's everyday environment affect buying decisions or brand
perceptions and why
Experiments
- Allows investigators to establish cause-and-effect relationships. In other words, investigators
can isolate different effects by manipulating an independent variable, and keeping other
variables constant, to see how it influences a specific outcome variable.
Intuition isn’t always right. In fact, sometimes it is entirely wrong.
- In essence, choice overload refers to a cognitive process in which people have a difficult time
making a decision when faced with many options. There are a few reasons for this:
o It becomes more difficult/stressful to determine which option is the best one for you.
o As humans, we inherently feel sorrow about the opportunities that we forego.
o Moreover, when it’s not clear which option is best for you, you’re more likely to
regret the decision that you eventually do make.
Field Experiment
- Field experiments are done in the everyday (i.e. real life) environment of the participants. The
experimenter still manipulates the independent variable, but in a real-life setting.
o Strength: Behavior in a field experiment is more likely to reflect real life because of its
natural setting, i.e. higher ecological validity than a lab experiment. Also, there is less
likelihood of demand characteristics affecting the results, as participants may not
know they are being studied. This occurs when the study is covert.
o Limitation: There is less control over extraneous variables that might bias the results.
This makes it difficult for another researcher to replicate the study in exactly the
same way.
Choice overload can leave you dissatisfied with the choice you made, what is often described as
“buyer’s remorse.” Or it can even lead to behavioral (choice or decision) paralysis, which is a situation
“where people are faced with so many choices that they can’t decide among them and make no
choice at all.”
,They found four conditions under which consumer may experience choice overload (Chernev et al.):
- When people don’t have the time and want to make a quick and easy choice.
- When the product is complex (so fewer choices help the consumer make a decision).
- When you don’t have any prior information.
- When the goal is to purchase as opposed to browse.
When dissatisfaction with too much choice becomes likely….
- Choice-set complexity
o How are the options organized, is there a dominant option, and what information is
provided about each option? For example, you may have five laptop options to
choose from but see 10 pieces of information about each. Or you may be presented
10 laptop options but only one piece of information about each. The former is a more
complex choice set, and is likelier to result in choice overload.
- Decision-task difficulty
o How difficult is the actual act of deciding? Some decisions must be made quickly, like
choosing a meal option from a menu, while others may have much longer time limits
or none at all. The lesser time you have to make a choice the more likely it will lead to
choice overload.
- Preference uncertainty
o How much do you already know what you want? The more you know about your
preferences, the easier it is to make a choice. If you have already established that
buying a Fairtrade peanut butter is your most important consideration in choosing a
peanut butter jar, for instance, it will be easy to compare multiple options along this
dimension.
- Decision goal
o Are you buying or browsing? What is the ultimate goal of sifting through all of these
options? If the goal is to make a conclusive choice, that may mean considering trade-
offs carefully and potentially agonizing over a decision. If, alternatively, the goal is just
to gather information that may help with a future decision—such as browsing cars or
looking at potential rental homes—then choice overload may be less likely.
,Iyengar and Lepper ‘’When choice is demotivating: can one desire too much of a good thing?’’
Current psychological theory and research affirm the positive affective and motivational
consequences of having personal choice. These findings have led to the popular notion that the more
choice, the better – that the human ability to manage, and the human desire for, choice is unlimited.
Research has shown that as the attractiveness of alternatives rises, individuals experience conflict as
a result tent to defer decision, search for new alternatives, choose the default option, or simply opt
not to choose.
Consumer research suggests that as both the number of options and the information about options
increases, people tend to consider fewer choices and to process a smaller fraction of the overall
information available regarding their choices.
As the complexity of making choices rises, people tend to simplify their decision-making processes by
relying on simple heuristics.
Specifically, the choice overload hypothesis underlying these studies is that, although the provision of
extensive choices may sometimes still be seen as initially desirable, it may also prove unexpectedly
demotivating in the end.
In addition, to provide a clear test of the choice overload hypothesis, several additional
methodological considerations seemed important. On the one hand, to minimize the likelihood of
simple preference matching, care was taken to select contexts in which most participants would not
already have strong specific preferences. On the other hand, to minimize the potential importance of
effortful information search, care was also taken to select tasks for which "right" and "wrong" choices
would be subjective, so that the effort involved in making a choice would be largely a function of
personal preferences. Finally, across experiments, we sought to examine this hypothesis in both field
and laboratory settings. Using these criteria, then, the present studies tested the hypothesis that
having a limited and more manageable set of choices may be more intrinsically motivating than
having an overly extensive set of choices.
Study 1
The central aim of Study 1 was to examine whether the number of options displayed affected
consumers' initial attraction to or subsequent purchase of the displayed product.
Thus, consumers who encountered the extensive-choice condition were more attracted to the booth
than consumers exposed to the limited-choice condition.
, Thus, consumers initially exposed to limited choices proved considerably more likely to purchase the
product than consumers who had initially encountered a much larger set of options.
Certainly, they appear to challenge a fundamental assumption underlying classic psychological
theories of human motivation and economic theories of rational choice—that having more, rather
than fewer, choices is necessarily more desirable and intrinsically motivating. The findings from this
study show that an extensive array of options can at first seem highly appealing to consumers, yet can
reduce their subsequent motivation to purchase the product.
Study 2
The results from both studies suggest that the provision of extensive choices does not necessarily
lead to enhanced motivation when compared with contexts that offer a limited array of choices.
Quite the opposite seems to be the case.
Thus, the results of Studies 1 and 2 support the hypothesis that extensive-choice contexts may be
initially more appealing but are subsequently more likely to hamper people's intrinsic motivation.
One possibility is that people encountering overly extensive choices use a choice-making heuristic
that necessarily leads them to feel less committed to exercising their preferences.
In other words, when people have "too many" options to consider,
they simply strive to end the choice-making ordeal by finding a choice
that is merely satisfactory, rather than optimal. Doing otherwise would
demand more effort than seems justified by the prospective increase
in utility or satisfaction.
In other words, choice-makers in extensive-choice contexts might feel
more responsible for their choices given the potential opportunity of
finding the very best option, but their inability to invest the requisite
time and effort in seeking the so-called best option may heighten their
experience of regret with the options they have chosen.
Study 3
In particular, participants in the limited choice condition (48%) were significantly more likely to
choose chocolates as compensation, as compared with participants in both the extensive-choice
condition and the no-choice condition.
The three studies described in this report demonstrate for the first time the possibility that, although
having more choices might appear desirable, it may sometimes have detrimental consequences for
human motivation. Studies 1, 2, and 3 provide compelling empirical evidence that the provision of
extensive choices, though initially appealing to choice-makers, may nonetheless undermine choosers'
subsequent satisfaction and motivation. Study 1 showed that although more consumers were
attracted to a tasting booth when the display included 24 flavors of jam rather than 6, consumers
were subsequently much more likely to purchase jam if they had encountered the display of only 6
jams. Study 2 revealed that students in an introductory college level course were more likely to write
an essay for extra credit when they were provided a list of only 6, rather than 30, potential essay
topics. Moreover, even after having chosen to write an essay, students wrote higher quality essays if
their essay topic had been picked from a smaller rather than a larger choice set. Finally, Study 3
demonstrated that people reported enjoying the process of choosing a chocolate more from a display
of 30 than from a display of 6. However, despite their greater initial enjoyment in the extensive-
