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A cognitive processes analysis of individuals' use of location-based services


Abstract and Figures

The recent profusion of smartphones in the mobile industry offers new opportunities for mobile services vendors. One of the most influenced service categories is location-based services (LBS). Based on insights from behavioural decision-making, a theoretical framework is developed to analyse individuals' decisions to use LBS. We focus on the cognitive processes involved in individual decisionmaking. Our research is based on two studies. First, we investigated the use of LBS through semi-structured interviews of smartphone users. Second, we explored daily LBS use through a study based on diaries. The findings highlight the distinct value dimension in specific contexts of use and the positive experiences of the service as the main drivers of LBS use. Thus, the user decision to use LBS can be described by either a comparative mode based on the value of LBS in relation to other available options, or by an intuitive mode where past experiences trigger the use of heuristics. These modes in turn underscore the positive influences on the continuance of LBS use.
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Lehrer, Christiane, Ludwig-Maximilians-University Munich, Ludwigstr. 28, 80539 Munich,
Constantiou, Ioanna, Copenhagen Business School, Howitzvej 60, DK 2000 Frederiksberg,
Hess, Thomas, Ludwig-Maximilians-University Munich, Ludwigstr. 28, 80539 Munich,
The recent profusion of smartphones in the mobile industry offers new opportunities for mobile
services vendors. One of the most influenced service categories is location-based services (LBS).
Based on insights from behavioural decision-making, a theoretical framework is developed to analyse
individuals’ decisions to use LBS. We focus on the cognitive processes involved in individual decision-
making. Our research is based on two studies. First, we investigated the use of LBS through semi-
structured interviews of smartphone users. Second, we explored daily LBS use through a study based
on diaries. The findings highlight the distinct value dimension in specific contexts of use and the
positive experiences of the service as the main drivers of LBS use. Thus, the user decision to use LBS
can be described by either a comparative mode based on the value of LBS in relation to other
available options, or by an intuitive mode where past experiences trigger the use of heuristics. These
modes in turn underscore the positive influences on the continuance of LBS use.
Keywords: Smartphones, Location-based services, Use patterns, Behavioural decision-making
1 Introduction
The recent profusion of smartphones in mobile telecommunications markets around the world is
offering opportunities for mobile data services that have not reached the mass market in many
countries of the Western world until recently. One category of these services are location-based
services (LBS). LBS are defined as services that use the current geographic position of a mobile user
to provide personalised services (Perusco and Michael, 2005). LBS have been around for quite some
time, although not available to private users. Initially, basic tracking of mobile location information
was used in the 1980s for trucking and freight services (Pura, 2005). It is widely accepted that, until
recently, LBS had failed to live up to the expectations of becoming mass-market products (Bellavista
et al., 2008).
Nowadays, LBS have become highly popular due to various technical advances and new marketing
strategies (May et al., 2007). A key driver of this popularity are new mobile devices, especially
smartphones offering high resolution colour screens, increased processing power, new functionalities,
and inbuilt high-performance positioning technologies such as GPS. Additionally, the widespread
availability of broadband wireless infrastructure facilitates the use of mobile data services. Operators
have also changed their pricing models with new attractive offers for fast data connections (e.g. flat
rates for mobile internet instead of users paying by the megabyte). The success of smartphones and
other portable devices has already led to an enormous increase in the amount of data being transferred
on networks. According to Cisco Visual Networking, worldwide mobile data traffic will increase 39-
fold between 2009 and 2014, reaching 3.6 exabytes per month by 2014. According to EITO's forecast,
the number of global mobile subscribers (currently 5.1 billion) is set to reach to 5.6 billion in 2011.
Along with the proliferation of smartphones comes the growing popularity of mobile applications.
Started by the Apple App Store, today nearly every mobile company offers complementary services
developed by third-parties on their own app stores. Services vary in cost, from free downloads to
expensive ones, depending on their purpose of use. The top ranked free services include LBS such as
point of interest search tools (e.g. for restaurants, bars, hotels, banks, petrol stations, pharmacies and
so on), train and public transport information and traffic jam warning. Top-selling services include
LBS such as car navigation software, weather information, running applications and city guides.
The market trends suggest that LBS are now widely used by smartphone users. However, as LBS have
only been used by mobile users for a short time, there is limited research on their actual use. Most
previous studies have focused on the adoption of LBS, as the earlier low adoption rates of LBS
motivated researchers and practitioners to investigate the reasons. Costs, security and privacy issues,
quality of LBS information (e.g. information accuracy and update), and lack of knowledge about LBS
were identified as the main barriers to LBS adoption (e.g. Chang et al., 2007; May et al., 2007). Users’
privacy concerns have been studied as well (e.g. Sheng et al., 2008). LBS use was investigated by Pura
(2005), who found that conditional value (i.e. use context), commitment, and monetary value had the
strongest influence on behavioural intentions to use LBS. This indicates that the value of LBS is
highly context-dependent and that people lack motivation to use LBS unless they create value in
specific situations.
As LBS have become popular mobile services thanks to market developments, we are now able to
analyse user behaviour by focusing on the adopted services. However, LBS use should not be viewed
in isolation. Users have traditionally acquired location-related information through other means such
as the stationary internet, paper maps or face-to-face interactions with others. These traditional
channels are now being complemented by the new mobile channel. Thus, multiple channels, fulfilling
user needs of location-based information, coexist. Hence, users do not choose to use LBS in isolation,
but take into consideration available alternatives. In this paper we set out to investigate the cognitive
processes involved in the decision to use LBS. Our research question is:
How do an individual’s cognitive processes influence their use of location-based service?
We address this question by adopting a theoretical approach based on behavioural decision-making
(Kahneman, 2003) and conducting empirical research based on interviews as well as a diary study
accounting for daily-use. The contribution of this study is twofold. First, it contributes to mobile user
behaviour research by underlining the cognitive (i.e. perceptual and intuitive) processes involved in
LBS use and highlighting the importance of value dimensions. Going beyond traditional IS models
and introducing an alternative theoretical perspective is expected to enrich our understanding of the IS
post-adoption behaviours. Second, our study provides useful insights for the market players by
underlining the importance of investigating the situations of LBS use in relation to its perceived value.
The rest of the paper is structured as follows. The next section describes the theoretical background in
order to position the proposed framework. Section 3 includes the theoretical framework, which is
based on insights from behavioural decision-making. The research approach is described in section 4.
Sections 5 and 6 present the study findings, which are then discussed in section 7. The conclusions and
the future research direction are presented in the last section.
2 Theoretical background
Research on LBS use falls into the core stream of IS research on user behaviour. Various theoretical
perspectives have been used in IS research to understand the adoption and use of new services or
technologies. Different models have been introduced to explain the adoption intentions, focusing on
the user’s perceptions of the technology’s performance and his/her competences (e.g. TAM, UTAUT),
as well as focusing on the social and cognitive determinants of the user (e.g. TRA, TPB). The models
of TPB/TRA focus on the determinants of the adoption intentions rather than the actual use or on the
value perceptions of the product or service under investigation. Besides, the underlying assumption of
these models is that the adoption intentions are a good predictor of the user behaviour. Existing
theories have proven useful when studying single applications and technologies, however, the use of
LBS takes place in an environment where new mobile services compete with existing technological
and non-technological means for acquiring similar information. Thus, the choice to use LBS is not
made in isolation. While we acknowledge the importance of this type of research in explaining the
individual determinants of adoption intentions, it is our contention that the decision process for LBS
use is determined by value perceptions and heuristics, as well as the context of use. Drawing on
behavioural decision-making theories is therefore an important approach that can provide new and
valuable insights.
In this choice context the value perspective can supersede the technology perspective. Perceived value
refers to the subjective value that the user receives or experiences in using the service (Bettman et al.,
1998). Recent research findings suggest that mobile service use is value-driven instead of technology-
driven (Constantiou, 2009; Pura, 2005). Consumers’ evaluation of a mobile service is largely based on
how valuable they perceive the content provided in a particular context of use and less on technology
aspects such as technical complexity (Pura, 2005). We assume that such value-related dimensions are
also prominent in LBS use. We view the decision to use LBS as the outcome of the individual’s value
assessment, which is based on some cognitive processes.
The context of use is an important parameter which influences the decision process because of the
choice tasks involved in specific situations as well as the specific mode of assessing information in
specific settings. For example, when people find themselves in a context of use already known and
experienced, then their decision may be based on heuristics (Payne et al., 1992). Moreover, the
individual decides in a constructive mode which decision strategy to use depending on the context of
use, acting as an “adaptive decision maker” (Payne et al., 1993). Recent studies of mobile data
services have focused on the effect of contextual factors on the use (e.g. Barnard et al., 2007; Mallat et
al., 2009) and the user’s value perceptions (Anckar and D’Incau, 2002). As mobile services are
designed for use anytime and anywhere, it is reasonable to assume that their value may change in
different use contexts and this in turn will influence usage behaviour. For example, Mallat et al. (2009)
found that users particularly appreciate the benefits of mobile services in situations when they are in a
hurry or when no other alternative are available.
3 A theoretical framework for individuals’ use of LBS
Kahneman and Tversky (1979) made the first systematic attempt to analyse decision-making and
preference formation in a descriptive manner. Individuals use different cognitive systems to assess
information during the decision process (Kahneman, 2003). First, the perceptual system uses
comparative processes affected by contextual stimuli. Second, the intuitive system uses heuristics to
facilitate and accelerate the decision-making process by reducing the amount of information to be
processed (Bazerman, 2008). Both the perceptual and intuitive cognitive systems are based on
automatic reactions or impressions, which are monitored by the reasoning system during the
evaluation, or judgement phase (Kahneman, 2003). An individual’s choice of a specific LBS can be
viewed as the outcome of a decision process using both the perceptual and intuitive cognitive systems,
and lightly monitored by reasoning processes. The individual is not expected to spend a lot of
cognitive effort in order to explicitly assess all the parameters or to process information in detail
before using a LBS, as she may do before buying a house, for example.
The proposed theoretical framework is based on cognitive processes stemming from the perceptual
and intuitive cognitive systems, which are introduced in the analysis of individuals’ choices of LBS.
Cognitive processes are clustered into two groups, the referencing processes which draw upon the
perceptual system and the heuristic-based processes which are involved in the intuitive system.
The influence of the cognitive processes in the individual’s decision is moderated by the external
environment, where the choice is made. In the literature on preference construction, researchers have
examined individuals’ choices in relation to the external environment, or context (e.g. Lichtenstein and
Slovic, 2006). For example, context effects may lead to assessment of tradeoffs or comparisons
between services of different categories (e.g. Internet versus mobile enabled services) in various
contexts of use (e.g. home versus working place with close substitutes available). These effects depend
on the background and the local contexts.
The background context refers to an individual’s experiences with the product and knowledge about
products with similar characteristics. This information contributes to preference construction as well
as to the subjective evaluation of a product/service’s attributes and tradeoffs (e.g. price versus quality)
(Simonson and Tversky, 1992). For example, an individual’s experience with similar services offered
on the Internet either for free and at a low quality of service, or for a flat price and good service
quality, may set the background context (Constantiou, 2009). If LBS are offered at a flat price, the
service quality should be at least as good as that provided by free Internet services.
The local context refers to the context of use, such as the situation in which the decision is made,
which includes or not a set of available options. In case of LBS this particularly refers to the presence
or absence of substitute products/services (Constantiou, 2009; Blechar et al., 2006). For example, the
availability of online services at home through the Internet may defer LBS use at home. The context of
use may also influence the cognitive processes involved in the choice by changing the stimuli
experienced by the individual. For example, in case of an emergency, the different prices of available
options for acquiring location-related information and the comparisons may be disregarded in the
decision process because the immediate need for the service is more important than its cost.
Consequently, a high price for the service may be accepted in the particular situation influenced by
emergency (Constantiou, 2009).
Figure 1. The theoretical framework for investigating the LBS use
3.1 Referencing processes in LBS use
Referencing processes, based on the perceptual system, are triggered by the value dimensions of a
service and are reference dependent. A key cognitive process of referencing is triggered by the product
or service price. Thaler (1980) introduced the concept of transaction utility. An individual’s
perception of the value of a transaction (e.g. service use) is shaped by comparing the service’s actual
price with the reference price, the price of the service in the “reference transaction”. The reference
transaction, and hence price, are influenced by both background effects, in terms of experiences and
knowledge of the service attributes, as well as the local context, in terms of other options available to
the individual in the specific situation. If the reference price is higher than the actual one, the
individual perceives a gain (i.e. positive transaction utility) from the current service use. This in turn
motivates the individual to use the service (e.g. positive decision) and vice versa. For example, if a
LBS user has been using a service for free, the introduction of a price may lead to discontinuance of
Many LBS are offered for free. In this case, referencing processes may be activated in relation to the
perceived effort of using the LBS compared to a “reference service” which constitutes the “status
quo”. Individuals are subject to loss aversion and thus have a strong tendency to remain with the
“status quo” since the disadvantages of leaving it loom larger than the advantages. This behaviour is
known as the “status quo bias” (Samuelson and Zeckhauser, 1988). For example, moving from a
current LBS to a new service can be seen as a loss solely because of the negative subjective value of
the individual having to change the “status quo” of his routines in mobile service use and put effort
into developing new routines for the new service. Status quo bias may also influence the choice of a
LBS that is already known to the user from another channel (e.g. Google Maps), and hence leads to a
lower subjective loss, over alternative options (e.g. navigation services). In these cases the background
context has a strong influence in the referencing processes and the subsequent decision of the
individual (Kahneman et al., 1991).
Referencing processes are also influenced by the local context, the context of use. The value of a
service may vary in different situations. Google Maps constitutes a typical example. The user may
perceive the service use as very valuable when navigating in an unknown place and no other means
are available to provide directions.
3.2 Heuristic-based processes in LBS use
Heuristic-based processes are based on the intuitive system of thinking. The individual choice of a
LBS may be motivated by the specific context of use and can occur in an automatic and associative
manner through the intuitive cognitive system. This involves the use of heuristics aimed at reducing
the cognitive burden of information processing (Kahneman, 2003).
A central cognitive process in this category involves the use of the availability heuristic (Bazerman,
2008). An individual using the availability heuristic focuses on a specific “vivid” service’s dimension,
which in turn becomes the prominent reason for the choice of a specific option (Simonson and
Tversky, 1992). The individual focuses on available information, which is easily accessible to her
memory due to vividness. This type of information may come from the individual’s experiences or
knowledge about the service, the background context. For example, a positive experience with Google
Maps, in which the user enjoyed finding a place easily (e.g. in less time than expected), may become a
key reason that leads to the same service choice in a future situation.
The individual may also use the representativeness heuristic (Bazerman, 2008). This heuristic is used
to simplify information processing in the decision process by focusing on representative information,
rather than considering actual data and facts, a form of selective information processing. In such cases,
people use stereotypic approaches to assess information as part of their decision process. Mobile users
may generalise their opinion of LBS services of a specific category based on the knowledge they have
for a single service in this category. For example, some “point of interest” search tools do not always
display updated and complete information in specific locations (e.g. Qype, AroundMe). This low
quality attribute may have a negative influence in the use of other LBS services in the same category
even if the user does not know their respective content quality.
Another cognitive process involves the affect heuristic (Bazerman, 2008), which underlines the pivotal
role of emotions in determining the prominent service dimension. The affect heuristic can be explored
in services with hedonic value. For example, emotions like desire may highlight the hedonic
dimension of a service and motivate its use. Alternatively, fear may also induce the use of specific
LBS (e.g. being lost in an unknown area/city).
Finally, the local context has a strong influence on the activation of cognitive processes. An individual
may choose to use a LBS in situations where it is the sole option or where there are multiple options
available (e.g. Internet services). Depending on this context, different service dimensions become
prominent. In the case of separate evaluation, the individual seeks, in an intuitive approach, an easy to
understand, or a ‘simple’ service attribute (Hsee, 1996), which becomes the reason for making a
choice (e.g. choosing a LBS with simple interface). Such a choice is more likely to be based on the use
of heuristics. In the case of joint evaluations, when multiple options are available in a context of use
(Hsee, 1996), the individual focuses on a more complicated dimension, since most of the services have
more than one dimension. She then compares the different options and makes the choice (e.g. LBS
with the highest information accuracy). Such a choice is more likely to be influenced by referencing
4 Research approach
We investigated LBS use in the German mobile telecommunications market, one of the most advanced
markets in Europe. In recent years there has been an impressive increase in the availability of
smartphones and unit sales in Germany are expected to grow to 10.1 million in 2011 (Bitkom, 2010).
The study included two parts. First, we conducted semi-structured interviews to collect data for in-
depth investigation (Lacity and Janson, 1994) of LBS use patterns. The interviewees described LBS
use in their everyday life, as well as what they thought about LBS use, through open-ended questions.
The interviews were conducted in German over a period of two months, and lasted between 30 and 45
minutes each. They were tape-recorded and subsequently transcribed and translated into English. The
group of participants consisted of 40 people, 72% male and 28% female, covering a broad age range
from 14 to 40 years, and diverse backgrounds (pupils at high school, students, or employees of private
companies). Participants had been using a smartphone from 1 to 25 months. The sample was not
representative of the German population, but did represent early adopters of smartphones, whose LBS
use patterns we wish to investigate.
The interviews included two parts. The first part was dedicated to the general smartphone use.
Following this, a definition of LBS was provided to participants, along with the example of Google
Maps. The second part included questions on the LBS use: a typical situation of LBS use, the
experiences of the interviewee, the alternative means available (such as the Internet or the radio) in
specific situations. Participants were also asked about their reasons for using each service as well as
their value perceptions in different situations and their willingness to pay. Finally, they were asked
about frequency of use. These questions allowed us to collect information about the factors affecting
users’ cognitive processes and the context of LBS use.
Each of the authors analysed the empirical data by carefully reading and reflecting on the transcribed
data, before comparing their analytical notes and resolving differences. The coding of the data was
then made around the theoretical concepts/elements of the proposed framework (i.e. background
context effects, local context effects, referencing processes, and heuristic-based processes) for each
service. We focused on how the decision to use a specific LBS is shaped by the elements described in
the proposed framework, following a pattern matching approach (Lee, 1999).
Second, we complemented the cross-sectional interviews with an event-contingent diary method
(Bolger et al., 2003) in order to capture the dynamics of daily LBS use and its underlying cognitive
processes. We used insights from the interviews to describe context of use, alternative means of
getting location-related information and to specify measures of heuristics and referencing. The study
included 16 participants and ran for two weeks. Respondents ranged in age from 25 to 35 years, were
equally divided into men and women, were all employed or self-employed, and were all smartphone
users. In this study we focused on young professionals and not on other groups to make sure that the
participants had a well-structured daily routine with repeated usage situations. While 16 subjects
constitute a relatively small sample size, it is still appropriate for a diary study in which each person
contributes in-depth data over the course of two weeks. Moreover, our aim was to gain a better
understanding of the dynamic aspect of LBS use rather than to produce statistically generalisable
Prior to the diary survey, we met with each participant to explain how the study would proceed and
how we defined location-related information. We also conducted semi-structured interviews with
questions about the channels used for acquiring location-related information, channel availability in
different use contexts, LBS use and experience as well as technical skills. Over the following two
weeks participants were asked to fill in a diary entry every time they actively looked for location-
related information (e.g. directions or points of interest nearby). Each entry was made through a brief
online survey (< 2 minutes), which could be accessed through the user’s mobile phone to facilitate
prompt completion. The survey included three questions about the context (physical location, time,
type of information needed and familiarity with the surroundings), one question about the channel
choice (including LBS application, Internet applications through mobile device or PC or laptop, asking
other people or car radio) and one question about the use of heuristics or referencing in the service
choice. In particular, the availability heuristic was described by two items: “It came to my mind first”
and “I used this channel a lot recently”. The representativeness heuristic was described by two items:
“It offers the best information” and “It’s the most trustworthy/reliable channel”. The affect heuristic
was described by two items: “I just like the channel” and “I had an urgent need for the information.”
Finally, referencing was described by one item “After weighing the alternatives it was the
quickest/easiest way to get the information.” The measures for heuristics and referencing were
developed by the authors based on a thorough literature review and were validated in a discussion with
two domain experts (i.e. psychologists). After the diary study had been completed, a post-interview
was held with each participant to assure that there weren’t any content-related or technological
difficulties with the diary and that the usage behaviour recorded in the diaries was representative. The
empirical findings are presented in the next two sections.
5 Analysing the use of LBS
All the services used by the interviewees fall into the category of pull-based infotainment services
(Schiller and Voisard, 2004), i.e. the mobile user submits a request to receive information. Push
services, which provide information without an active request (e.g. location-based advertising), were
not used by the respondents. Having observed the use patterns of the respondents, we present the
services used in two groups based on static versus dynamic service use. The first group includes
services for which the user’s location during service use is (at least temporarily) static. The second
group includes services that are mainly used when the user is moving. The services in this category
only provide value to the user when she is moving, for example in a car or on foot, as they are meant
to constantly track the user’s location and provide updated information (e.g. navigation instructions).
The services analysed in this study were used by at least three interviewees.
5.1 Static LBS use
This group includes services supporting information seeking about a specific location, or about arrival
and departure times of public transportation means. Three service categories are analysed. The first
category is of point of interest services, which provide information about the nearest restaurants, bars,
banks, pharmacies or entertainment activities, available in close proximity to the user’s location. The
second category consists of city guides, providing information about historical, or other important
buildings and places in a specific location. The third category concerns public transportation services.
These services are mainly used when the user is situated in a specific location and wants to get
information about time schedules and places around her.
Point of Interest Services are information services about available places around the user and
constituted the most popular category. People perceived these services as particularly useful for
spontaneous needs, for example when looking for a restaurant in the evening. “LBS are good for
fulfilling spontaneous needs. But if I plan to eat out with my friends or my girlfriend I think about it in
advance and make a reservation.” (Male, 30)
People also used the services for time-sensitive decisions. “I pretty much use it always when there is
no time to do a lot of searching.” (Female, 26)
It seems that the point of interest services are particularly useful when the user explores new areas or
looks for new places. “I think it brings the highest value in unknown cities because in your home town
you usually know your way.” (Male, 30)
Some people used the services even when other means are available (e.g. the Internet), because they
perceived them as being more efficient. “I am at home and I need the telephone number of a pizza
place, which is just around the corner to order a pizza…with Around Me I get the result quicker and
easier [than from Google].” (Male, 28 years)
The user’s experiences are pivotal in the use decision. Some people have positive experiences
compared to other means. I prefer to use Around Me to look for restaurants in advance, because I
can find the places quicker than through Google. When I search for ‘Munich Chinese restaurant’ in
Google, a lot of things pop up about China, which is not relevant in this situation, or restaurants that
are not in Munich.” (Male, 18)
Thus, the user compared the LBS with the other services constituting the status quo through
referencing processes and chooses the LBS because of the higher perceived value in terms of ease of
use, speed or accuracy of information retrieval. Despite the distinct value dimension of the services in
specific situations, people do not seem willing to pay. The background context effects, from the use of
similar services on the Internet for free, influence them. “…if Around Me cost money I would get the
same information through Google Maps, which is for free.” (Male, 32)
Some people indicated lack of trust in the services’ accuracy and articulate negative generalisations
about the service, which might be activated by the use of the representativeness heuristic. “I used it
more at the beginning. By now I prefer to ask someone in the streets, because this is often quicker…
an important factor is that I don’t really trust the service as I am not sure if it doesn’t sometimes
mislead me.” (Female, 24)
City guides provide information about specific buildings, or places near the location of the user. The
services identified in this study are mainly based on Wikipedia. They are not used very frequently. The
use depends on the frequency of the individual finding herself in specific contexts of use. “I use
Wikihood to kill time while waiting for a friend.” (Male, 30)
Other situations where the services were perceived as valuable involved information retrieval for
social purposes. “…I am there with guests and wanted to give them a city tour, but I didn’t know much
about the sights.” (Female, 29)
The users acknowledged the value dimension of these LBS compared to the Internet version in terms
of targeted information about specific locations. However, they were not willing to pay for them. “No,
I don’t think so, because it just connects services that are free of charge; on the one hand Wikipedia
and on the other hand the localization functions.” (Male, 27)
Public transportation planners provide real-time information on arrival and departure times, and are
popular services. Similar services are available on the Internet. People use the services on their
smartphones when they are out because it is convenient. Participants underlined the servicesvalue,
based on previous experiences. “The app can locate me and then it shows me perfectly visualized how
I get from A to B with Berlin public transportation. That’s a great app.” (Male, 34)
People described different situations in which the services were valuable. The ordinary situation of use
involved planning to go somewhere by public transport. “I use the app when I am at work or at a
friend’s place and it starts raining and I don’t feel like going home by bike. Then I look what the next
and best ways are to get home with public transport.” (Female, 29)
They also used the services when making a time-sensitive choice on transportation means. I am on
my way somewhere and I wander if I catch the last subway around the corner in order to get back
home. Or if I can use a bus instead, of which I don’t know yet.” (Male, 28)
Overall, static LBS were valuable to the users in specific contexts of use where users were seeking
information on their surroundings. This value enabled them to move away from the status quo in
certain situations, and to use the services instead of those available on the Internet. However, the
strong influence of the background effects through the free Internet use of similar services hindered
the users’ willingness to pay. For point of interest services, the users seemed to have their favourite
service, and generalised about its good performance in line with the representativeness heuristic.
Further, in some cases they used referencing to compare the effort it takes to get the information.
Users’ decisions to use public transportation planner were either made through referencing processes,
in a comparative mode focusing on the accuracy of information provided, or in an emotional state of
need or urgency which triggered the affect heuristic.
5.2 Dynamic LBS use
This group includes four service categories. These categories involve map services supporting
navigation, traffic monitors, radar detectors of installed speed controls and services providing
information on a user’s running activities. Such services are mainly used when the user is moving (e.g.
in a car or on foot).
Mapping and navigation services were the most popular LBS category, used by nearly all the
respondents. The main advantage of these services is the provision of precise navigation instructions
to the user while on the move. Maps services are also available on the Internet (e.g. Google Maps). For
some people they were an important reason to buy a smartphone. We observed a strong background
effect from the service use on the Internet, as people were already familiar with the functionalities and
the value of online mapping and navigation services. “Before I used Google Maps on my iPhone I
used it through the stationary Internet, because in my opinion it is the best maps service.” (Male, 26)
People highlighted the services’ value in specific situations compared to other means providing similar
services. “Before Google Maps mobile you had to look up and print out the route at home. With the
mobile app, finding routes is a lot more efficient and time-saving.” (Male, 27)
People described positive experiences with this service category in unknown areas where they had to
find directions. The availability heuristic seems to have been a strong determinant of the service use.
“I completely got lost in Hamburg and thought I either pay a taxi or I find the right direction in any
other way. Then it crossed my mind that I’ve got Google Maps on my phone. It really rescued me in
that situation!” (Female, 26)
Some people had moved away from the status quo and were now treating the use of mapping and
navigation services on the smartphone as a new status quo. “Today I don’t even look up directions in
advance anymore, because I know that I’ve got the iPhone with me.” (Female, 26)
People were willing to pay for these services due to underlying value dimensions and the high
frequency of use. “If Google Maps wasn’t preinstalled, I could imagine paying for it, because the
service offers a great added value and is very helpful in a lot of situations. I use Google Maps very
often, a couple of times per week, nearly daily.” (Male, 27)
Traffic monitors were not used very frequently, but mainly when people wanted to know whether
there was high traffic on the highways. The respondents compared the services’ convenience of
information acquisition with the car radio. “Some Autobahns [motorways] are notorious traffic jam
routes, in such situations I don’t want to rely on the radio, because the announcements are over very
quickly.” (Male, 40)
The time-sensitive information provided by the services, which in turn affects the user decision, was
another key dimension for the service use. “I use the app in this situation, because it can save me time.
I could also use the radio, but the information is available only temporarily and when you don’t know
the area you often do not know which streets are relevant.” (Male, 26)
The users seemed to use referencing processes and compare traffic monitors with other available
options. This category had a well-defined value dimension in specific situations compared to other
means and users were willing to pay a small amount (ranging from 0.79 to 2 Euros) for such services.
Radar detectors were not frequently used. They were mainly used when people were following
routes known for speed controls, and/or they were in a hurry. “I don’t use it very regularly, but once in
a while when I drive a longer distance or on streets known for radar controls.” (Female, 29)
“If I am late and I roughly know where I am going, I prefer the radar.” (Female, 26)
There was disagreement between interviewees’ perceptions of the services’ value, because of their
limited potential in providing location-based information (e.g. most services can only locate installed
speed controls). Interviewees had mixed experiences. They were either unable to identify the service’s
value or they seemed pleased with its reliability. Some interviewees could imagine paying for this
service category if it was further developed.
Running applications were used rather frequently. Similar services are available on the Internet,
allowing people to measure the distance of specific routes (e.g. Gmaps Pedometer). With a LBS users
can automatically record their route and their performance during activities such as running. The users
identified the value of services that provide useful information about their sports activities. “Run
Keeper is very good and I like to use it, because I get a lot of information on my running.”(Male, 30)
People also compared different options available on the Internet and found additional value
dimensions in the LBS. These services offer added value for the user, compared to her current
situation, and they motivated the move from the status quo. “But compared to Gmaps Pedometer it has
the advantage that it works automatically and I don’t need to enter my route manually.” (Male, 28)
Interviewees were willing to pay small amounts (ranging from 1.5 to 3 Euros) for the services.
Overall, the dynamic LBS were valuable to the users, and they often reported positive experiences and
a willingness to pay for them. The services’ value motivated users to move from the status quo, which
in many cases is represented by an Internet service or the car radio.
6 Cognitive processes influencing LBS use
Over the two weeks of the diary study, participants reported a total of 104 instances in which they
looked for location-related information. The number of instances per participant varied between 1 and
19. The results show that when looking for location-related information, users mainly searched for
navigation information as well as for addresses and telephone numbers, weather information and
arrival and departure times of transportation. There was a strong tendency for people to use their
smartphone over other channels to acquire location-related information. LBS were mainly used when
people were on the move, either by foot, bike or car, (45% of instances), followed by use at home
(26% of instances). Interestingly, LBS were the preferred channel in all contexts of use, even when
other channels were available. For example, at home or at work, people chose to use LBS on their
smartphones over a PC or laptop.
On their smartphone, people clearly preferred specialized LBS apps instead of searching for
information through the mobile Internet browser. In 60% of instances people chose LBS, in 16% they
chose the mobile browser and in 10% the stationary Internet. The remaining instances involved use of
the radio, the car navigation system and asking other people nearby.
When choosing a channel to access location-related information, users acted largely intuitively (80%
of instances) based on heuristics. The availability heuristic was most prominent in all usage situations.
In 41% of situations, people chose the channel that came to their mind first, or had been used a lot
recently. In contrast to the theory, this was also true in contexts of use in which more than one channel
was available (i.e. in a joint evaluation mode). The results indicate that the individuals hardly ever
compared the different options available, but instead acted in a habitual way by choosing the service
they always use. The experienced smartphone users (i.e. over one year of device use) mainly used the
availability heuristic (47% of the instances). The novice smartphone users (i.e. less that one year of
device use) used both the availability and the affect heuristic. The representativeness heuristic was not
used frequently. However, the experienced users used it more often than the novice users. Both users
types also used referencing processes on some occasions (23% of instances).
Turning to specific LBS use, weather applications were mainly used at home and public transportation
services were used equally in all usage situations. Mapping, navigation, weather and point of interest
applications were mainly used due to the availability heuristic. The use of traffic information services
was mainly triggered by the affect heuristic, suggesting that the services were used in situations with
an urgent need for traffic jam information. In case of public transportation services, representativeness,
availability and referencing processes were all equally used. Users weighed the options available
according to how fast and easily they provided information. Additionally, users of this service
category underscored information quality and service reliability.
7 Discussion
The study focused on LBS use by investigating userscognitive processes leading to service choice.
We introduced a theoretical framework to investigate a new research topic, namely LBS use. This
topic could not be investigated earlier because of market characteristics (i.e. various technical
challenges constraining the services availability). Motivated by current market opportunities leading to
the widespread availability of LBS, we focused on usersdecisions to use a service in specific
contexts. We argue that existing adoption models are not the adequate research tools for this type of
investigation because they have a different focus, namely the adoption decision. While we do not
claim that technology is not an important element in the use of LBS, we argue that the use of LBS is
more a technology-enabled than a technology-driven decision. Most smartphones have user-friendly
interfaces and the applications provided build on Internet service use experience (e.g. Google Maps).
We introduced a new theoretical framework, based on insights from behavioural decision-making.
This framework enabled us to analyse the influence of context of use, which is prominent in LBS use,
as well as the user decision process when choosing a service. By focusing on the underlying cognitive
processes, we highlighted the importance of the value dimension and heuristics in LBS use. The
proposed framework was a useful tool in the investigation of LBS use and might be used to
complement existing models in the domain of IS adoption and user behaviour.
The empirical findings of our research highlight interesting characteristics of mobile user behaviour
that should be acknowledged and addressed in the marketing strategies of interested parties. The LBS
use patterns indicate that popular services are related to information seeking and acquisition. It seems
that most features of LBS are also available on the Internet. This in turn underlines the background
context effects, especially for services that are frequently used on the Internet. There are positive
influences on LBS choices, which can be seen through the use of the availability heuristic in the
choice of LBS if the user has had a positive recent experience in using a similar Internet service (e.g.
Google Maps).
The background context effects on the referencing processes are more complicated. The use of Internet
services sets a status quo for users who seek extra value from the LBS use in order to include it in their
use patterns. Thus, Internet services influence the usersperceived value of LBS. Additionally, in
terms of pricing, the availability of free services through the Internet hinders the pricing opportunities
for some LBS. However, new situations of service use (i.e. while on the move) create new pricing
opportunities, as there is no direct substitute and thus no “clear” status quo for the user to compare the
LBS with.
Local context effects are marked by the specific situation or context of use. For time-sensitive
information needs, while on the move, people highly appreciate the positioning functionalities and the
information accuracy of LBS. In many cases participants described LBS use as the outcome of a
heuristic-based process. For example, the use of navigation and mapping services covers the need for
instant information, which is intuitively required in order to make another decision (about the choice
of a route). For static LBS use, the local context effects motivate the use of heuristic-based processes.
Interestingly, when other options are available, such as in the home, users in the diaries study
indicated a shift from the Internet as a “status quo” to LBS. It seems that users mainly choose LBS as
part of a habitual pattern when they find themselves in well-known contexts of use. This finding needs
further research in order to identify the substitution effects and the new trends in channel conflicts.
8 Conclusions and further research
We set out to explore current LBS use as enabled by the current availability of smartphones. We
proposed a theoretical framework describing the use of LBS in relation to cognitive processes, which
has as a point of departure the perceptual and the intuitive cognitive systems. The framework enabled
us to analyse the use of LBS in specific contexts and to identify the value dimension for users. The
proposed framework contributes to research of user behaviour in the IS field by providing a new tool
for analysing user choice based on insights of behavioural decision-making. The framework
approaches the user as a consumer of services in different contexts of use where other options may or
may not be available. As such, it underscores cognitive processes in decision-making rather than
technology perceptions and beliefs. The research findings offer insights for practitioners into LBS use
patterns. The findings underline marketing opportunities for the LBS developers, particularly in terms
of pricing strategies. However, market players should interpret our findings with some caution, since
our respondents were mainly using services available through Apple’s App Store.
The diary study is subject to two limitations. First, there may be missing data. Even though
participants stated that they filled in the entries reliably, they may have forgotten to record entries (e.g.
because they were not aware that they were looking for location-related information) or were selective
in reporting (e.g. because they thought some events were not important enough to report). Second,
although a comparison of the electronic time-stamps of the diary entries and the time of channel
choice stated by the participants showed that the majority of entries were made within an acceptable
time span of one hour after the channel choice took place, a few entries were made within two to three
hours after the channel choice. Those instances may have decreased reliability, since users might not
have recalled the use situation and the exact process leading to their specific LBS choice.
Future research efforts should focus on testing the explanatory power of this framework for the use of
LBS through a large-scale quantitative study, or longitudinal studies of smartphone users’ behaviours,
and sampling techniques that allow the estimation of the general population trends should be applied.
Moreover, the theoretical arguments should be put under scrutiny and should be developed further to
include the specific characteristics of communications markets such as network effects. Finally, we
believe that the proposed framework can be used to analyse and predict the user behaviour in other
digital services markets.
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Research in the adoption of innovative services in mobile communications markets has not offered a comprehensive explanation of how the individual makes a choice. This article proposes a theoretical framework for the analysis of the adoption decision of innovative mobile services such as mobile TV. The decision to adopt the service can be viewed as a choice based on two cognitive processes of reasoning and referencing, as postulated in behavioural decision making. The framework has both theoretical and practical value. From a theoretical perspective, it illustrates the manner in which referencing and reasoning influence the individual’s decision to adopt innovative services in the mobile telecommunications market. From a practical perspective the framework offers a market analysis tool which can generate useful insights for the vendors.
A viewpoint that has recently emerged in decision research is that preferences for objects of any complexity are often constructed — not merely revealed — in generating a response to a judgement or choice task. This paper reviews a program of research that traces the constructiveness of preferences to the use of multiple strategies in decision making, contingent on task demands. It is argued that individuals often build strategies opportunistically, changing their processing on the spot depending upon the information they encounter during the course of solving the decision problem.
The economic theory of the consumer is a combination of positive and normative theories. Since it is based on a rational maximizing model it describes how consumers should choose, but it is alleged to also describe how they do choose. This paper argues that in certain well-defined situations many consumers act in a manner that is inconsistent with economic theory. In these situations economic theory will make systematic errors in predicting behavior. Kanneman and Tversey's prospect theory is proposed as the basis for an alternative descriptive theory. Topics discussed are: undeweighting of opportunity costs, failure to ignore sunk costs, scarch behavior choosing not to choose and regret, and precommitment and self-control.