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The Skeptical Shopper: A Metacognitive Account for the Effects of Default Options on Choice
Abstract
A default option is the choice alternative a consumer receives if he/she does not explicitly specify otherwise. In this article we argue that defaults can invoke a consumer's "marketplace metacognition," his/her social intelligence about marketplace behavior. This metacognitive account of defaults leads to different predictions than accounts based on cognitive limitations or endowment: in particular, it predicts the possibility of negative or "backfire" default effects. In two experiments, we demonstrate that the size and direction of the default effect depend on whether this social intelligence is invoked and how it changes the interpretation of the default.
... Article towards certain choices (4). Consumers may also perceive default designations as indicators of product value (5,6). ...
... Default options lead to the creation of default effects, which are an increase in the probability of selection of a particular option against others for no other reason than it being assigned as the default (4). Existing research on defaults posits three explanations for the default effects. ...
... When consumers have accessible MM, they exercise greater caution in their decision-making processes, keenly aware of the self-serving intentions of marketers (9). Situations where the default options appeared biased were associated with fewer default effects (4). ...
Previous research has investigated how certain strategies can influence people's decisions in simple, everyday choices, such as selecting a loaf of bread or purchasing a book online. The objective of this study was to further the understanding on choice architecture elements of default opt-ins and social proof tags, which are interface elements that signal the use of a product by other individuals. We analyzed their effect in an e-commerce context, specifically exploring high-stake economic decision-making that is characterized by high economic cost (financial or opportunity cost) and high decision importance. We achieved this through investigating the effect of default opt-ins on test ride bookings for an automobile, as well as the influence of social proof tags on click-through rates and ‘bookings’, which involve a payment of ~5% of the vehicle price made by customers to reserve a place for them on the purchase waitlist. We hypothesized that a default opt-in in the test ride form would have a significant positive influence on the conversion rate. Our findings supported our hypothesis. We further hypothesized that the addition of social proof tags on choices within a set of alternatives would result in a significant increase in the consideration of those choices for purchase. Though the results were inconclusive, our comparative analysis showed the potential importance of both the default options and social proof tags on consumer decision-making, creating an opportunity for further research into the effective use of the combination of defaults and social proof tags in an e-commerce context.
... If people want to minimize the cognitive effort in a decision, they will stick with the default option rather than actively change the default (cf., Johnson & Goldstein, 2003). Second, decision-makers assume that defaulted alternatives are endorsements or recommendations by the question-poser (Brown & Krishna, 2004;McKenzie et al., 2006). A third explanation for the default effect is that individuals frequently make choices that maintain the current state of the world (Masatlioglu & Ok, 2005;Samuelson & Zeckhauser, 1988). ...
... In one study, researchers presented participants with products to purchase (e.g., music keyboards), and they varied the degree of information about the seller (Brown & Krishna, 2004). Some participants read generic information about the seller, whereas other participants read additional information about the seller having financial troubles and potentially going out of business. ...
... The same general tendency may occur for all default effects. People interpret the default as a recommendation from the experimenter or from an expert with whom interests are assumed to align, as people see these experts as trustworthy rather than selfinterested, as in Brown and Krishna's (2004) study. ...
A key finding within nudging research is the default effect, where individuals are inclined to stay with a default option when faced with a decision, rather than exploring alternatives (e.g., a preselected job opportunity among two alternatives). Similarly, the study of framing effects delves into how the presentation and context of decisions influence choices (e.g., choosing vs. rejecting a job opportunity among two alternatives). Specifically, previous literature examining choosing versus rejecting decision frames in various situations has found that these frames do not invariably complement each other; therefore, individuals’ preferences vary based on the task frame. Yet, simultaneous testing of multiple nudges remains relatively unexplored in the literature. In the current study involving 1,072 participants, we examined how framing and default effects can influence decision-making in hypothetical scenarios. The decision scenarios involved two different domains—work and health. We found that framing had a strong effect on decision-making in both work and health domains, whereas default setting contributed only to a limited extent in the work domain and no effect was found in the health domain, mirroring related recent research findings. We argue for a more careful design of nudge interventions when multiple overlapping nudges are used and for a contextual approach to applying behavioral science to citizens.
... Centrality refers to the extent to which a given attribute is a defining characteristic of one's mental representation of the product (Sloman et al., 1998). Given that default attributes often carry meaning (Brown & Krishna, 2004), the opt-out hybrid product default policy may result in the target green attribute being seen as more central, whereas the opt-in policy will reduce the salience of the green attribute, allowing traditional product attributes to come to the forefront, degrading perceptions of green attribute centrality, and thus impacting downstream purchase behavior. ...
... Such default policy approaches have been established in various contexts, notably in public policy (Brown & Krishna, 2004;Carroll et al., 2009;Johnson et al., 2002;Johnson & Goldstein, 2003) and environmental behavior studies, whereby scholars have found that the opt-out "green default" policy can enhance energy-saving behavior (e.g., Brown et al., 2013;Liebe et al., 2021), increase the uptake of smart-grid technology (Ölander & Thøgersen, 2014), guide people's contributions to carbon offsetting programs (e.g., Araña & León, 2013), and increase proenvironmental online shopping behavior (e.g., Taube & Vetter, 2019). Indeed, the opt-out default policy can act as an implied recommendation from a provider (McKenzie et al., 2006), give more weight to the option, thus making it harder to relinquish (Dinner et al., 2011;Jachimowicz et al., 2019), or induce effort associated with a refusal (Johnson & Goldstein, 2003). ...
... Despite this, we assert that the selection of a hybrid product default policy will maintain influence on downstream purchase behavior, as the attribute acts as a carrier of meaning, transmitting product information (Briley et al., 2000). Consumers often prioritize visually prominent attributes during evaluation, a phenomenon known as selective processing (Bettman et al., 1998), and may use defaults to reduce uncertainty and infer relative value (Brown & Krishna, 2004). In the case of the opt-out hybrid product default policy, we posit that consumers may shift their reference point to include its information in their evaluation (Brown & Krishna, 2004), as the mode is automatically active during use. ...
In today's marketplace, products can feature both “green” and “non‐green” attributes and consumers, with the press of a button, can select their preferred operating mode (green vs. nongreen). In this research, we define such products as hybrid, arguing that their choice architecture design—specifically, the default operational mode—plays a pivotal role in influencing consumer evaluation and purchase behavior. In four experiments, we found that consumers view a hybrid product as more environmentally friendly when the green mode is the default setting and can be turned off (opt‐out), rather than when the green mode must be activated (opt‐in). Specifically, we show that, when efficiency (vs. effectiveness)—related attributes are valued, the opt‐out (vs. opt‐in) default policy enhances purchase behavior. Moreover, we find that this effect is mediated by green attribute centrality, in that consumers perceive the opt‐out (vs. opt‐in) default policy as more central. Finally, we find that the effect of default policy is stronger for consumers with an analytical, as opposed to a holistic, thinking style. This article contributes to both default policy and hybrid product literature and provides managerial implications for the design and promotion of hybrid products.
... If people want to minimize the cognitive effort in a decision, they will stick with the default option rather than actively change the default (cf., Johnson & Goldstein, 2003). Second, decision-makers assume that defaulted alternatives are endorsements or recommendations by the question-poser (Brown & Krishna, 2004;McKenzie et al., 2006). A third explanation for the default effect is that individuals frequently make choices that maintain the current state of the world (Masatlioglu & Ok, 2005;Samuelson & Zeckhauser, 1988). ...
... In one study, researchers presented participants with products to purchase (e.g., music keyboards), and they varied the degree of information about the seller (Brown & Krishna, 2004). Some participants read generic information about the seller, whereas other participants read additional information about the seller having financial troubles and potentially going out of business. ...
... The same general tendency may occur for all default effects. People interpret the default as a recommendation from the experimenter or from an expert with whom interests are assumed to align, as people see these experts as trustworthy rather than self-interested, as in Brown and Krishna's (2004) study. ...
Nudges have gained prominence in both policy development and the study of cognitive biases, yet simultaneous testing of multiple nudges remains relatively unexplored. A key finding within nudging research is the 'default effect,' where individuals are inclined to stay with a default option when faced with a decision, rather than exploring alternatives. Parallel to this, the study of framing effects delves into how the presentation and context of decisions influence choices. Specifically, examining 'choosing vs. rejecting' decision frames in various situations has found that these frames do not invariably complement each other, therefore individuals’ preferences vary based on the task frame. In the current study involving 1072 participants, we examined how framing and default effects can influence decision-making in hypothetical scenarios. The decision scenarios involved two different domains—work and health. We found that framing had a strong effect on decision-making (work domain: odds ratio (OR) = 0.46, 95% CI [0.29 – 0.72]; health domain: OR = 0.42, 95% CI [0.27–0.66]), whereas default setting contributed only to a limited extent in the work domain (OR = 0.49, 95% CI [0.31–0.76]) and no effect was found in the health domain, mirroring related recent research findings. We argue for a more careful design of nudge interventions when multiple overlapping nudges are used and for a contextual approach to applying behavioral science to citizens.
... The basic argument persists that the default option will be chosen more often than if another default option is selected (Johnson et al., 2012). In short, in the dominion of choice architecture, defaults are settings or choices that apply to individuals who do not take active steps to change them (Brown & Krishna, 2004). Default options contribute to real-world choices in areas as diverse as organ donation (Johnson & Goldstein, 2003), insurance decisions (Johnson et al., 1993) retirement savings (Thaler & Benartzi, 2004), or green energy (Ebeling 85 Page 4 of 19 ...
... By remaining with the default choice, psychological defaults allow for risk-averse or regret-averse individuals to assume less personal responsibility (Hart & Halpern, 2014). Brown & Krishna (2004) describe three explanations for accommodating the biases imposed by the default as attention-based default effects, default effect due to processing distortion, and metacognitive default effects (Brown & Krishna, 2004). In this realm, defaults allow individuals to reduce the cognitive effort required to make a decision (i.e., Park et al., 2000), but still do not distance themselves from this anchor according to their preferences. ...
... By remaining with the default choice, psychological defaults allow for risk-averse or regret-averse individuals to assume less personal responsibility (Hart & Halpern, 2014). Brown & Krishna (2004) describe three explanations for accommodating the biases imposed by the default as attention-based default effects, default effect due to processing distortion, and metacognitive default effects (Brown & Krishna, 2004). In this realm, defaults allow individuals to reduce the cognitive effort required to make a decision (i.e., Park et al., 2000), but still do not distance themselves from this anchor according to their preferences. ...
This paper explores decision-making in the context of active default choices, i.e., choices made when no alternative is presented. Using data from a UT energy study, the paper examines how active defaults influence participation in a hypothetical green renewable energy utility program. The study analyzes collective effects and considers demographic and psychographic factors. Significant impacts on default choices and framing were observed for attributes like age, political preference, years at current residence, perception of home efficiency, natural gas consumption, and importance of saving energy. The research demonstrates that specific demographic attributes are more susceptible to nudging effects when presented with a climate-change-related program, but scenarios with “opt-out” framing alone yielded the most significant results across all attributes. Consequently, the paper recommends that policymakers and utility firms proposing renewable energy programs use an “opt-out” default choice for certain demographic groups to enhance receptivity and participation. The study’s average of 46% willingness to participate in a more expensive utility renewable energy program suggests a need for further investigation into the link between hypothetical willingness and actual follow-through. Ultimately, the findings underscore the potential benefits of default choices and nudging effects in addressing climate change-related issues among stakeholders seeking to mitigate environmental impacts.
... Among the various forms of nudges, defaults have emerged as one of the most effective and extensively studied. Research across diverse decision-making domainsranging from retirement and insurance plans to organ donation, environmental protection and product selectionconsistently demonstrates a strong preference for defaults (Brown and Krishna, 2004;Choi et al., 2002;Dinner et al., 2011;Huh et al., 2014;Johnson and Goldstein, 2003). In the realm of privacy decisions, defaults have proven particularly influential. ...
... Psychological explanations for the efficacy of defaults include cognitive and physical laziness, the endowment effect, normative effects and the omission bias, along with interactions among these (Brown and Krishna, 2004;Choi et al., 2002;Dinner et al., 2011;Huh et al., 2014;Johnson and Goldstein, 2003;McKenzie et al., 2006). Defaults are often seen as the norm or standard choice and become endowed with a sense of ownership, leading to their higher valuation (Kahneman et al., 1991;Thaler and Sunstein, 2009). ...
Purpose
In light of increasing public concern over social media privacy breaches, this study aims to unveil the context-dependent and individual-specific nature of social media disclosure decisions. In particular, this paper aims to examine the disclosure choices of maximizers and satisficers in the presence of privacy setting defaults on social networking sites (SNSs).
Design/methodology/approach
Data are collected through an online scenario-based experiment with 200 Mechanical Turk participants. The study uses a 2 (Privacy setting default: No Sharing [“Only Me”] vs. Public Sharing [“Everyone”]) × 2 (Decision mindset: maximizing vs. satisficing) between-subject design.
Findings
Analyzing responses using ordered logistic regression models, this paper found a general tendency toward default settings, with maximizers exhibiting a stronger default preference than satisficers. For instance, maximizers were eight times more likely, and satisficers were only three times more likely to choose “Everyone” in the presence of the “Everyone” (vs. “Only Me”) default when deciding who can post on their private page. The perceived level of privacy risk further shaped satisficers and maximizers’ preferences.
... 39 If all of the characteristics of the options are assumed to be observed, this result can be considered a status-quo bias and has been evidenced in other work (e.g. Brown and Krishna, 2004;Pichert and Katsikopoulos, 2008). ...
... One-stopshops connect households to energy advisory services and technology providers in order to provide households with information options for energy improvements and available financing instruments. These services have been shown to bridge the gap between supply and demand of residential energy improvements (Boza-Kiss and Bertoldi, 2018 [134]). ...
This paper offers insights on the factors that determine household choices related to energy use, based on data from the third OECD Survey on Environmental Policies and Individual Behaviour Change (EPIC). The analysis profiles households according to patterns in reported energy use and investment in energy related technologies, assesses the factors driving such decisions and estimates households’ willingness
to pay to reduce the emissions of the electricity they use. Results suggest that the feasibility of installing low-emissions energy technologies appears to remain a key obstacle to their uptake, and that households are willing to pay a small but positive premium for electricity produced with fewer emissions. The presence of cross-country differences in behaviours and preferences signals the importance of considering local factors in approaches to energy policies. Environmental concern and environmental motivation increase engagement in sustainable choices, pointing to the cross-cutting relevance of policy efforts to improve environmental knowledge and awareness.
... Research indicates that the process of marketing persuasion and related semantic cues can influence the extent to which consumers' persuasion knowledge is activated. Factors such as flattery by marketers [47], negative advertising comparisons [48], unreasonable price comparisons [49], inappropriate brand placements [50], the use of rhetorical questions [51], biased information sources [52], and expensive default options [53] can all activate individuals' persuasion knowledge. ...
... Compared to consumers whose persuasion knowledge is not activated, those whose persuasion knowledge is activated generally exhibit poorer default product choice intentions [53], purchase intentions [63,64], product recommendation intentions [56], advertising attitudes [63,65], and online public praise [44]. For instance, if consumers perceive an advertisement's source and information as credible but also detect hidden manipulative intentions, such as attempting to solicit empathy for donations or evoke guilt, they may feel manipulated or even angry due to untimely appeals in the advertisement, resulting in negative attitudes toward the advertisement and the brand [65]. ...
In recent years, live streaming has become the mainstream way of online shopping in China. As the dominant player and performer in live streaming, streamer plays a crucial role in consumers’ purchase decisions. Therefore, this study focuses on the self-presentation behavior of streamers in the context of e-commerce live streaming and explores the mechanism of its influence on consumers’ purchase intention from the perspective of persuasion knowledge. A total of 538 consumers from China participated in this anonymous survey and the results indicate that helpful and empathetic behaviors of streamers can significantly enhance consumers’ purchase intention, while derogatory, exaggerated, and flattering behaviors of streamers can significantly diminish consumers’ purchase intention. Persuasion knowledge played a mediating role and had a significant negative effect on purchase intention, while anticipated inaction regret weakened its effect on purchase intention.
... Specifically, we argue that consumers with low believability (but not those with high believability) in the new line extension will respond more favorably to messages framing brand concepts aligned with the other brands in the extension category. Consumers with low belief in the message tend to be more skeptical (Ang et al., 2023;Chan & F., 2020;Raziq et al., 2018), thus having richer cognitive structures concerning the advertising (Obermiller & Spangenberg, 1998), which can impose greater advertising efforts in convincing them (Ang et al., 2023;Brown & Krishna, 2004;Obermiller et al., 2005). Hence, when non-believers see a luxury brand introducing a new downward extension at a lower price point relative to its parent brand, they place greater emphasis on the dissonance or incongruity between the new line extension and the parent brand. ...
... Classifying prospective consumers in terms of low versus high levels of believability would help marketers develop more effective media plans (Brown & Krishna, 2004;Riley et al., 2013). However, this challenges marketers to discern between the targeted audiences when they see the ad, a feat that could be proven impossible to achieve. ...
This article examines the influence of framing a brand's concept as functional versus symbolic in the advertising of a new vertical line extension. In this research, we carried out two online experiments and collected data from 415 participants recruited from MTurk to investigate the moderating role of believability on the effect of brand concept framing on consumers' purchase intentions of vertical line extensions. The results indicate that (i) consumers evaluate a vertical extension advertising message more positively when it is framed in a consistent manner with the targeted price/quality segment and not with its parent brand or existing product line and that (ii) this effect is moderated by consumer believability such that an advertising framing effect is found for high, but not low, in believability. Perceptions of category fit mediate the relationship between framing brand concept and the evaluation of the extension. This study contributes to the advertising and marketing literature by exploring how consumers can interpret brand concept framing in advertising messages of vertical line extensions differently depending on their level of believability and, in turn, influence their purchase intentions.
... Many communities offer a choice between energy suppliers: one providing conventional energy and another alternative energy (Sunstein & Reisch, 2013). Where a choice is offered, conventional energy is typically offered as the default; that is, a preselected option received if the consumer does nothing, in other words, does not "opt-out" (Brown & Krishna, 2004;Johnson & Goldstein, 2013). Defaults are thought to occur due to a combination of suggestion or endorsement, "anchoring" or bias toward initially presented conditions, inertia and procrastination, the endowment effect, and loss aversion (Sunstein & Reisch, 2013;Pichert & Katsikopoulos, 2008). ...
... Defaults have been used in a variety of situations to influence major life decisions such as health care (Ansher et al., 2014;Halpern et al., 2013;Halpern, Ubel, & Asch, 2007), organ donations (Abadie & Gay, 2004;Davidai, Gilovich, & Ross, 2012;Johnson & Goldstein, 2003), and retirement savings (Beshears et al., 2008;Choi, Laibson, Madrian, & Metrick, 2003;Clark & Young, 2021;Madrian & Shea, 2001). Defaults have also been shown to influence other consumption decisions such as car insurance plans (Johnson, Hershey, Meszaros, & Kunreuther, 1993), car option plans (Park, Jun, & McInnis, 2000), product customization (Brown & Krishna, 2004;Herrmann et al., 2011), and food choices (Campbell Arvai, Arvai, & Kalof, 2014). More recently, experimental, and real-world studies have applied defaults in the promotion of green energy choices. ...
Alternative energy, or green energy, has the potential to mitigate carbon dioxide emitted from conventional power sources, particularly at grid parity – the point at which alternative energy reaches a levelized electricity cost that is less than or equal to purchasing grid-supplied electricity. This mixed methods study examined the effect of defaults on electricity utility selection at grid parity by young people who may be choosing a utility for the first time or may have recently experienced choosing a utility. Additionally, we investigate the justification of participants’ choice of electricity utility. A chi-squared test determined that the gray electricity utility was chosen significantly more often in the gray default condition than in either the no default or green default conditions confirming the influence of defaults even at grid parity. Those who selected green energy regardless of the default scenario expressed that they did so because the alternative energy option was the same price, but cleaner. Those who chose the conventional energy source regardless of default conveyed doubt that green energy would remain at grid parity and held a belief that conventional energy is more reliable along with feeling manipulated by the green utility’s informational message. Results from this study indicate that continuing to offer gray energy as the default and green energy as the alternative could adversely impact the predicted large-scale shift in generation from gray energy sources to green energy sources when grid parity is prevalent.
... It seems reasonable to assume that the policymakers believe this to be the most ethical choice option for the population (Johnson & Goldstein, 2003). It has been found that decision-makers develop inferences about the preferences of choice architects, that organ-donation defaults are perceived as recommendations by policymakers (McKenzie et al., 2006) and that product-configuration defaults are perceived as recommendations by retailers (Brown & Krishna, 2004). In line with this theoretical explanation, trusting that the choice architect has the best interests of the target group in mind could play a crucial role in the effectiveness of defaults. ...
... Decision-makers who believe that the choice architect holds malevolent intentions should be less likely to accept the pre-selection and choose the default option. Brown and Krishna (2004), examining implied endorsement as a mechanism, found that participants were more likely to create counterarguments and to de-select an expensive default option when they received information about the financial motivation of the retailer as choice architect. Being faced with a choice situation under the control of a mistrusted choice architect can also create reactance (Brehm, 1966), possibly prompting an active de-selection of the default option. ...
... On the other hand, Ertimur and Gilly (2012) posited that differences in content creators usually evoke different potential consumer coping mechanisms. According to literature on persuasive knowledge, these coping behaviors may negatively impact consumer attitude, purchase intention, and sales volume (Brown and Krishna, 2004;Jung and Heo, 2019;Ryu and Park, 2020). In terms of social media content, some scholars indicate that consumers are more skeptical toward content posted by firms than content posted by Facebook users, which in turn negatively impacts brand attitude and purchase intention (Muller and Christandl, 2019;Mayrhofer et al., 2020). ...
... Prior studies have focused on how consumers respond to persuasive messages from advertisers. Specifically, activating persuasion knowledge of persuasive intent is associated with defensive responses, which decreases sales volume (Brown and Krishna, 2004) and likelihood of visiting a store (Morales, 2005). In addition, Mikolajczak-Degrauwe and Brengman (2014) stated that consumers with a high recognition of persuasive attempts from advertising content have greater negative attitudes toward them than those with a low level of persuasive recognition. ...
Purpose – This study applies the Stimulus-Organism-Response (S-O-R) theory to investigate how source
of content (firm- and user-generated content) impacts content-consumption, which is mediated by persuasive knowledge. While prior studies treat persuasive knowledge as a unidimensional construct, this study
addresses two dimensions of persuasive knowledge (conceptual and attitudinal). Lastly, this study explores
different effects of user-generated content related to different product types (utilitarian and hedonic) on persuasive knowledge
Design/Methodology/Approach – Three conditions of stimuli are designed to test our hypotheses with
214 participants familiar with brand-related content posted on Facebook. An independent t-test, MANOVA,
and PROCESS are employed in this study.
Findings – The results show that FGC stimulates more conceptual persuasive knowledge than UGC. By
contrast, consumers perceive UGC to be more appropriate and tend to like UGC more than FGC. In addition, this study finds that two dimensions of persuasive knowledge mediate the relationship between source
of content and consumer content consumption. Regarding UGC, this study shows that compared to hedonic
products, UGC regarding utilitarian products evokes consumers to infer persuasive intent and decreases
perceived appropriateness.
Research Implications – This study sheds light on proving a relevant application of the S-O-R theory and
regulatory theory to propose a holistic framework to help better understand the relationship between source
of content, product types, persuasive knowledge, and content-consumption in the context of Facebook.
... Furthermore, people not only choose the default option, but assume the default is the correct choice ( Johnson & Goldstein, 2003 ;Kahneman, Knetsch & Thaler, 1991 ). Defaults are more effective in consumer domains and lead the consumer to pick the choice that is offered as the default instead of the choice that they want ( Brown & Krishna, 2004 ;Jachimowicz et al., 2019 ;Park, Jun & MacInnis, 2000 ). Defaults affect choice because consumers are unintentionally manipulated toward the marketer's choice of default ( Brown & Krishna, 2004 ). ...
... Defaults are more effective in consumer domains and lead the consumer to pick the choice that is offered as the default instead of the choice that they want ( Brown & Krishna, 2004 ;Jachimowicz et al., 2019 ;Park, Jun & MacInnis, 2000 ). Defaults affect choice because consumers are unintentionally manipulated toward the marketer's choice of default ( Brown & Krishna, 2004 ). In application, if a company's choice of the default patient simulator is white and male, the consumer's choice of patient simulator will be affected by that company's choice of default (i.e., white and male). ...
Introduction
Default biases in the design of new medical training technologies may lead to disparities, especially for women and people of color in patient treatment and outcomes in prehospital emergency services and combat medicine. The goal of this work was to develop a taxonomy of medical patient simulators to determine their demographic makeup and whether there was evidence of default bias in product catalogs.
Methods
The authors identified 114 full-body patient simulators from seven major medical device companies. Simulator demographic information (e.g., patient sex/gender, race/skin tone) and simulator prehospital care procedure features (e.g., tension pneumothorax, massive hemorrhage) were cataloged using company website information sheets and product catalogs using a binary coding system. Procedures were further classified into two categories: sensitive procedures and non-sensitive procedures.
Results
Findings revealed that although several companies offer demographically diverse patient simulators, marketing of many existing patient simulators use the white, male body as the featured default patient. Female patient simulators and simulated patients of color were significantly less likely to have procedure capabilities that allow for the practice of treating sensitive areas of the body compared to default male patient simulators.
Discussion
Default bias in the design of medical patient simulators illustrate the importance of inclusive design to improve medical decision-making and reduce disparities in civilian and military patient outcomes and care. Practice implications include increasing the diversity of complex medical patient simulators, removing default selections, and featuring female and patients of color in product catalogs.
... Related to the design, we used the terms "experiment*", "evidence", "empirical", 1 Experimental evidence suggests different mechanisms to explain default effects. They can function as a reference value (Dinner et al., 2011;Samuelson & Zeckhauser, 1988), anchor (for preference construction) (Dhingra et al., 2012), social norm (Everett et al., 2015), persuasion attempt (Brown & Krishna, 2004), implicit recommendation (McKenzie et al., 2006), coordination device (Cappelletti et al., 2014), and through inertia (by imposing costs on default-deviation) (Madrian & Shea, 2001). The meta-analysis by Jachimowicz et al. (2018) reveals a considerable effect of defaults, but with considerable variation. ...
Do transparent and non-transparent nudges have similar effects? The question is central in recent research on behavioural public policy, as it leads to ethical and practical implications regarding policy-maker responsibility, citizen agency, and nudge design. We meta-analysed results from 23 publications designed to compare transparent to covert nudges including 117 effect sizes and found a positive effect of transparency on behavioural outcomes, but no effect on non-behavioural outcomes. The moderator analyses revealed that studies conducted online, manipulating the decision structure, and conducted in the domain ‘other’ tended to exhibit significantly positive transparency effects for behavioural outcomes. We note that all but two studies were conducted online or in the lab, and that there is an over-representation of research on default nudges (88% of total effects), severely limiting the generalizability of the findings. Thus, we call for an improvement of research conducted on transparent nudges and the inclusion of more nudge types, preferably in a field setting. We also stress the importance of defining the form of transparency that societies require for respecting their citizen's autonomy.
... Entrepreneurs navigate a complex landscape of uncertainties when making business decisions, and cognitive biases can significantly influence their choices, particularly regarding sustainability practices. One such bias is the default bias, which describes the tendency to favor pre-selected options, even if objectively better alternatives exist (Brown & Krishna, 2004;Johnson et al., 2002). This bias can hinder innovation for sustainability. ...
Behavioral biases pose a substantial challenge for entrepreneurs and managers seeking to achieve sustainable decisions. This review with practical consequences focuses on the underlying impact of these biases in pursuing sustainable practices. Through an in-depth literature assessment, the research identifies and categorizes biases into three categories: those that impede proactive action, those that alter information processing, and those that influence communication and decision-making. By analyzing existing research, the chapter explores how specific biases can cloud judgment and impede the adoption of sustainable business practices. Furthermore, the chapter proposes strategies to mitigate these biases, such as green nudging and negative visualization borrowed from stoicism, empowering entrepreneurs and managers to make more informed sustainable decisions. Ultimately, this review bridges the gap between behavioral science and entrepreneurial sustainability, offering practical insights for fostering a more environmentally conscious business landscape.
... Many studies have demonstrated that the choice architecture can alter the decisions of individuals (Johnson & Goldstein, 2003). Manipulating the default choice (i.e., the preselected option that people are assumed to select if they do not specify otherwise (Brown & Krishna, 2004)) can influence decisions, even when respondents have both options-to apply or not to apply-and their freedom of choice is unrestricted. This phenomenon is called the default nudge. ...
People apply more frequently when "apply" is the default choice (Apply Default architecture) than when "do not apply" is the default choice (Not-Apply Default architecture). However, Apply Default architecture might let them make choices inconsistent with their preferences as this architecture is counterintuitive. Those trying to apply might mistakenly choose to not apply under Apply Default architecture. In this study, we hypothesized that people's choices under No-Default architecture (i.e., a choice architecture without a default option) are less consistent with those under Apply Default architecture than those under Not-Apply Default architecture (Hypothesis 1). We also hypothesized that people who spent more time on making decisions would make choices consistent with their preferences because when people spend sufficient time to understand the construction of Apply Default architecture, they can make choices consistent with their preferences (Hypothesis 2). We recruited 997 participants and asked them to make decisions under No-Default and Default architectures (Apply Default or Not-Apply Default architecture). The results supported both Hypothesis 1 and Hypothesis 2. A method to help applicants make choices consistent with their preferences is finally discussed.
... People may also come to regard the set default as signaling the recommended course of action which people use to infer an "implicit recommendation" (Brown & Krishna, 2004;Sher & McKenzie, 2006;Thaler & Sunstein, 2021). For example, when the default choice is set to "organ donor", decision makers may infer that policymakers aim to urge more people to become donors and would therefore go along with it. ...
[IMPORTANT: Abstract, method, and results were written using a randomized dataset produced by Qualtrics to simulate what these sections will look like after data collection. These will be updated following the data collection. For the purpose of the simulation, we wrote things in past tense, but no pre-registration or data collection took place yet.]
Default effect refers to the phenomenon that people tend to choose the default option in a choice-set. One of the explanations for the effect was that the default is perceived as the recommended option by the choice architect. In a Registered Report experiment with a Prolific sample (N = 600), we conducted replications and extensions of Experiments 1, 2, and 3 from McKenzie et al. (2006).
[The following findings will be updated in Stage 2 after data collection.]
Overall, we found [weak/medium/strong] support for the original findings. With our extensions to the replication study, we found… . We [found/failed to find] empirical support for participants’ views on organ donation policy defaults in Study 1 (χ² = X.XX, 95% CI [X.XX, X.XX]), making decisions in organ donation policy defaults in Study 2 (t = X.XX, 95% CI [X.XX, X.XX]), and making decisions in retirement plan defaults in Study 3 (t = X.XX, 95% CI [X.XX, X.XX]). Extending the replication, we added control group and participants uncertainty and trustworthiness to Study 3 as extensions and [found/did not find support…].
All materials, data, and code were made available on: https://osf.io/e5k4j/.
... Research has shown that the activation and use of persuasion knowledge requires cognitive resources (e.g., Kirmani & Campbell, 2004), and by distracting consumers (Campbell & Kirmani, 2000) accessibility to marketers' ulterior motives is impaired. Many different contextual triggers exist that provide information about marketers' motives, such as information about a firm's business status or tactics (e.g., Brown & Krishna, 2004;Campbell & Kirmani, 2000), or sponsorship disclosures that can activate and increase consumers' persuasion knowledge (e.g., Eisend et al., 2020). Marketers' activities (as assessed, for instance, through advertising intensity) also contribute to consumers' persuasion knowledge development, as consumers learn from exposure to persuasion attempts. ...
... The impact of advertisement is significant. Brown & Krishna (2004) found that advertisements evoking strong emotions are more effective in capturing attention and influencing consumer behavior. Petrova & Cialdini (2005) demonstrated that ads engaging the imagination can be more persuasive than those relying on factual information alone. ...
Housing decisions are often constrained by practicality, while dream home aspirations remain unrestrained. This gap widens significantly in the housing industry, where boundaries blur, advertising fairytale-like estates while providing homes closer to reality than dreams. This study researches, proposes, and tests a framework to assist in making informed housing decisions between dreams and reality. Through a set of 24 themes and a three-step funnel, this paper carefully weighs the themes and their overlapping spatial, architectural, aesthetic, and contextual variables against a spectrum. Positioned as mediating the psychology of decision-making and the dynamics of housing in the market, the paper controls demographic variability by selecting a single context. In this study, 183 Egyptian participants act as a microcosm of the global phenomenon. The framework is proven to be statistically significant, and the findings are multidimensional, revealing nuanced differences of complex residential aesthetic preferences. At the boundary between modernized fairy-tale home aspirations and limited housing practicality, this framework holds the key to making dream homes come true by informing existing and future housing decisions.
... The nudge strategies examined in this study improve individuals' insurance purchasing choices and can facilitate the selection of a suitable alternative through default rules (Brown & Krishna, 2004;Donkers et al., 2020;Sunstein, 2018;Thaler & Sunstein, 2008). Today, rapid advances in digital technologies, artificial intelligence, and machine learning-based algorithms allow insurance managers to recommend options that will lead individuals to more satisfactory outcomes about insurance than they can determine for themselves. ...
The expectancy theory developed in behavioral finance has led to a significant paradigm shift by incorporating cognitive factors into the financial decision-making process. Deviating from the traditional finance approach, which assumes individuals act entirely rationally in their financial decisions, behavioral finance focuses on cognitive biases within the scope of its examination. A portion of studies in behavioral finance centers on various cognitive biases that guide investor behavior in decision-making processes. In the study, starting from assertion that cognitive biases play a determining role in individuals' financial behaviors, the impact of overconfidence and optimism biases on insurance purchasing behavior is examined from a behavioral finance perspective. Practices that could ameliorate the effects of overconfidence and optimism biases on insurance purchasing decisions are analyzed within Thaler and Sunstein's Nudge theory. Based on this analysis, recommendations for implementing measures to mitigate the impact of the biases on insurance purchase decisions are provided.
... These studies, which appear in Table 4, showed that decisions typically requiring little time, such as street petitions and taxi tips (e.g., Haggag & Paci, 2014;Johnson & Goldstein, 2003), showed action default advantages, meaning that the default to sign the petition or tip were upheld. In contrast, studies with decisions typically requiring more time (Brown & Krishna, 2004;Di Guida et al., 2012;Keller et al., 2011;Shepherd & O'Carroll, 2013) showed either null effects or more frequent choices to act in opposition to the action default (see Table 4). For example, defaults to increase uptake of the HPV (Human Papilloma Virus) vaccine resulted in 75 percent agreement for the no-vaccination default and 52 percent for the vaccination one (Reiter et al., 2012). ...
... Research in marketing has provided related evidence that consumers have "marketplace metacognition"; that is, consumers are often aware that a firm's actions and messages within the marketplace may be deliberate tactics for achieving their own profit goals (Friestad & Wright, 1994;Kirmani & Campbell, 2004;Wright, 2002). For example, offering expensive pre-selected default options can lead consumers to infer that the firm has manipulative intent (Brown & Krishna, 2004). In the domain of context effects, choice makers often realize that choice sets are intentionally designed by choice architects to nudge them towards selecting certain alternatives (Hamilton, 2003). ...
... 148 However, as a behavioral intervention, changing defaults risks consumer backlash, especially where there is insufficient trust, or where the choice-architect's motivations are unclear or unsupported. 149,150 Nonetheless, public acceptance of Figure 4. The Avoid, Shift, Improve framework helps policy-makers to prioritize investments for transport emissions reduction low-meat alternatives appears to be growing in many countries 151,152 and in different contexts: even Burger King is experimenting with changing its default menu options to plant-based burgers. ...
Tackling climate change requires significant behavior change to reduce emissions, yet the scale required is far from being achieved. Behaviors are influenced by psychological characteristics, social and cultural norms, material and spatial environments, and political conventions. Much social scientific debate continues to be characterized by calls for either individual or system change, but a more cross-cutting perspective to understand various factors that can enable and accelerate pro-environmental choices is needed. This review provides an interdisciplinary synthesis of evidence on the potential and limitations of individual choice to mitigate climate change. We identify six domains of individual choice for climate action (food, energy, transport, shopping, influence, and citizenship). We find that individual, social, physical, and political factors combine to shape low-carbon choices but in ways specific to each domain, demanding different responses from policy-makers. Effective climate action requires a mix of interventions which address the multiple roles played by individuals: structural change by governments (“upstream” interventions), businesses and local authorities making sustainable options more available and attractive (“midstream”), and informational measures to shape individuals’ decision-making (“downstream”).
... Previous research has shown that various features of a choice and its context (e.g., number of alternatives, defaults, partitioning options, and design attributes) influence what a decision-maker chooses (Johnson et al., 2012;McCardle et al., 2009;Thaler & Sunstein, 2008;Larrick & Soll, 2008;Schwartz, 2004;Brown & Krishna, 2004;Goldstein et al., 2008;Fox & Clemen, 2005;Burson et al., 2009). For example, McCardle et al. (2009) build a decision-analysis tool to evaluate fundraising tiers in a charitable organization. ...
Companies often use hierarchical labels to describe the products in a choice set (e.g., Bronze/Silver/Gold, or Silver/Gold/Platinum). Does the label of the tiered products influence consumer choices? Through five experiments (totaling 1,954 participants), we find a labeling effect. On the one hand, consumers are more likely to make a purchase (i.e., they are less likely to defer) in the first place with superior-sounding labels. On the other hand, such labels shift choices down towards cheaper-priced products. Further, we find that product labeling moderates the choice share of a middle option such that the well-documented compromise effect diminishes with superior-sounding labels due to the shift towards cheaper-priced options. Our research contributes to the literature on framing effects, choice deferral, and the compromise effect. Our findings suggest companies should use superior-sounding labels if they want to increase overall sales, but inferior-sounding labels when they care more about increasing choices of higher-priced products.
... People with a higher degree of scepticism are more risk averse decision makers (Omer, Sharp, and Wang 2018). However, scepticism is more than merely being risk averse, it also indicates that people are more prejudiced, negative, or pessimistic towards something; it is about alertness to and careful consideration of the validity of the received information (Brown and Krishna 2004). Williams (1999, 35) argues that "a skeptic is someone with a skeptical attitude: he [or she] questions things (particularly, received opinions); he [or she] practices suspension of judgement". ...
This paper seeks to understand how supply chain actors demonstrate scepticism as a non-physical form of redundancy to maintain supply chain resilience. It provides lessons learnt from three case studies of dyadic blood supply chains involving three blood centres and twelve hospitals in England. This paper identifies three key elements of scepticism, namely information duplication, warranting, and cross-evaluation. These elements act as preventive mechanisms, avoiding the unwanted consequences of routine behaviour, and averting mindless actions resulting from reactive operations. We argue that scepticism can be adopted as a complement to supply chain redundancy practices, increasing the robustness and agility of supply chain operations, and therefore enhancing supply chain resilience. To the best of our knowledge, this is the first paper to address the notion of scepticism, emphasizing the pivotal role of human behaviour in the supply chain resilience literature. Despite its specific context, the findings could potentially be applied in other industries.
... For instance, in the area of economics, a customer may be accidentally persuaded to take the default option (Brown and Krishna, 2004). Research demonstrates that increasing defaults caused consumers to save more for retirement and buy more insurance (Johnson et al., 1993;Madrian and Shea, 2001). ...
This study intends to investigate the impact of opt-in and opt-out default nudges on Pakistani investors' decisions to make socially responsible investments, with the moderating influence of investors' financial literacy. A commercial online panel is used to gather data as part of an experiment with an incentive-based online survey. A total of N = 518 individuals is randomly assigned to two treatment groups-opt-in and opt-out-and one control group. The empirical findings of this study show that, although being less effective than the opt-out nudge effect, the opt-in nudge effect nevertheless has a considerable impact on SRI decisions. The study's results also show that financial literacy moderator has partially significant impact on the efficacy of default nudges. In order to improve investment instruments that might encourage SRI investment in society, SRI policymakers can benefit from this study.
... Two common forms of choice architecture that have been compared in terms of their relative effectiveness are the default option nudge and active choosing. The default option nudge involves pre-selection of a given alternative so that the individual is automatically opted in and must select another option to opt out (Brown & Krishna, 2004). In active choosing CA, an option is not pre-selected, and the consumer is free to choose, although some have argued that nudge elements are inherent in active choosing CA as well (Sunstein, 2016). ...
In dieser Arbeit wurde untersucht, ob, und in welcher Form, Digital Nudging im E-Mail-Marketing von Non-Profit-Organisationen (NPO) in der Not- und Katastrophenhilfe (NKH) dabei unterstützen kann, Einmal- und Mehrfachspendende unter geringem Ressourcenaufwand in Dauerspendende zu konvertieren. Dazu wurden mithilfe der Design Science Research Methodologie und der Digital-Nudge-Design-Methode vier Artefakte entwickelt, die den vier Digital-Nudge-Mustern Anker, Voreinstellungs-Anker, Phantom-Köder und Identifikations-Kohärenz entsprechen.
We propose a new conceptual framework for behavioral policy design that we call choice architecture 2.0. We argue that in addition to considering how different choice environments affect decisions (as in conventional choice architecture), choice architects should also be aware of the implicit interaction taking place between the targets of the choice architecture and themselves. When confronting a decision, people often engage in a social sensemaking process that entails an assessment of (a) the beliefs and intentions of the choice architect and (b) how their decision will be construed by the choice architect and other observers. We present examples of how this choice architecture 2.0 framework can be used to anticipate factors that moderate the success or failure of behavioral policy interventions, and we provide examples of factors that may trigger social sensemaking. We also present a template for a social sensemaking audit that policymakers can perform before implementing any particular design of choice architecture.
By understanding both the role of unions as an ‘experience good’ and the place of inertia in contributing to the prevalence of non-unionism, this article suggests that a union default could have a major impact in recruiting new members. Drawing upon a sub-sample of non-union workers in unionised workplaces from a study conducted in New Zealand, the authors show that a significant minority would stay in membership and support a union default. These results have positive implications for understanding how to shape the preferences of non-union workers in union and non-union workplaces.
Defaults are pervasive in consumer choice. Here, laboratory experiments that used eye tracking were combined with cognitive modeling to pinpoint the influence of defaults in the decision process, along with naturalistic experiments with large pre-registered samples to test the limits of defaults on consumer choices. Contrary to previous assumptions, in simple binary choices, default options did not potentiate rapid heuristic-based decisions but instead altered processes of attention and valuation. Model comparison indicated that defaults received a positive boost in value – a golden halo – that was large enough to increase hedonic choices when the default was hedonic, but had limited effects for utilitarian defaults or for when defaults were incongruent with background goals. The findings illustrate and quantify the mechanisms through which default options shape subsequent decisions in simple choices. Further, boundary conditions for when defaults can and cannot be used to nudge consumer choice are established.
India ranked third when it considered how many startups are coming globally in the business arena, focusing on promoting the startup ecosystem in the country. Past literature offers insights into the fact that companies believe that board diversity may provide a range of benefits to the business entity. The present study examined the linkage between succession planning and board-level diversity regarding board size, succession orientation, international exposure, and gender diversity. This study investigates a board-level step towards managing board diversity and inclusion. The top five Indian family businesses, which have over 50 years of operations and are registered on significant stock exchanges in India, have been selected to examine succession planning and diversity issues at the corporate level. Findings will be notable in that they explore new dimensions of succession planning and its linkages with factors affecting board-level diversity in family-owned corporate firms.
Purpose
This paper aims to explain how consumer persuasion knowledge and perceived deception in advertisements can influence consumers’ future evaluation of fake news about a brand.
Design/methodology/approach
This research develops a conceptual model using widely used persuasion knowledge theory and confirmation bias theory. A questionnaire-based online survey ( n = 410) was conducted by displaying an advertisement stimulus followed by a fake news stimulus to test the model. Covariance-based structural equation modeling was used to analyze the hypothesized research model.
Findings
The results demonstrate that consumers with high persuasion knowledge are more likely to trust and adopt fake news about an advertised brand through the mediation of perceived deception in the advertisement. Additionally, perceived deception indirectly affects information adoption through the mediation of news credibility.
Practical implications
Theoretically, this study contributes to the existing body of literature on advertising deception and fake news. This research also extends theory of persuasion knowledge in understanding adoption of fake news. Practically, this study has significant implications for various stakeholders, including brands, social media corporations and consumers.
Originality/value
This research adds novel insights in the relationship of consumers’ persuasion knowledge and credibility and adoption of fake news. Furthermore, the investigation of the relationship between the perceived deception in advertising and the adoption of fake news has not been explored, which is also novel.
Research in marketing, psychology, economics, and decision making has long examined what people choose, when people choose, and why people choose. But almost no research has examined how long people consume their choices. Here, we examined an asymmetry between choosing an option and consuming it. Under the aegis of nudges, we conducted two randomized longitudinal experiments on how long people consumed a choice that was incentivized vis-à-vis a decoy effect, default effect, and compromise effect. We found that these nudges influenced choosing and consuming in opposite directions: Participants were more likely to choose the nudged option; however, they consumed it less compared to participants who chose an identical non-nudged option. Our research thus demonstrates that nudges could lead people to consume a nudged option less after choosing it, illuminating the potential for future research to examine the unexplored area of longitudinal, post-acquisition, post-nudge effects.
The study investigates how people's tendency to avoid action, known as "omission bias," influences their financial decisions, specifically in the context of debt repayment to the UK government. Using a randomized controlled trial, we communicated with individuals who owed money, employing two distinct message framings. The omission‐framed message suggested that non‐response was seen as inadvertent, while the commission‐framed message treated non‐response as a deliberate choice. Analyses of nearly 40,000 responses revealed that repayment rates almost doubled with commission framing, reaching 23.2%, as opposed to 12% under omission framing. This reframing strategy generated over $1.4 million in additional revenue, underscoring the considerable real‐world impact of understanding and leveraging the omission bias in shaping financial behaviors.
Nudging consumers towards plant-based foods by making these choices the default option is a promising strategy for effecting sustainable dietary change. In the hypothetical context of online food ordering in a Northern European country, we examined the underlying mechanisms and effectiveness of swapping the default in menus from meat to a plant-based meat alternative. Results showed that pre-selecting a plant-based option in the online setting was not enough to increase choice of plant-based meals alone. Rather, additionally framing the plant-based default as the more sustainable or tasty option was needed to significantly increase choice. While ease was unimportant and held constant in this online setting, endowment and implied endorsement were found to mediate default success such that the positive influence of endowment outweighed the (surprising) negative effect via endorsement. In contrast to general theoretical expectations of default nudges, an endorsement by an online food provider is unlikely to encourage plant-based choices.
Sustainability represents an omnipresent topic and has been playing a prevalent role in almost all areas of life for several years. In addition to mobility and the challenges in the field of alternative drive technologies, forward-looking consumption, especially in the food and energy supply sectors, is increasingly being demanded and promoted. However, product transparency and thus the consumer's ability to judge a product as healthy, regional, organic or fairly traded, among other things, is suffering under the growing variety of consumer goods. Product manufacturers have recognized this and are addressing the issue with quality seals that suggest to consumers that they are dealing with the environment and their own bodies in a sustainable manner. This has led to the establishment of a behavioral economics technique known as nudging. The potential applications of nudging are steadily gaining in importance. American and British researchers and politicians are investigating this field of research with a White House Social and Behavioral Science Team and a Behavioral Insights Team (also called Nudge Unit), respectively, and are already successfully applying the insights gained in the process.
The paper I published investigates to what extent the method of nudging can be used to increase the willingness to buy sustainable products. Nudging is applied using normative information that suggests a social consumption norm and is intended to motivate participants to be more willing to buy the sustainable product variants. The normative information is represented and induced by word and percentage information. Additionally, we test whether there is a relationship between attitudes towards sustainability and willingness to purchase sustainable products.
The authors examine the effects of using a subtractive versus an additive option-framing method on consumers' option choice decisions in three studies. The former option-framing method presents consumers with a fully loaded product and asks them to delete options they do not want. The latter presents them with a base model and asks them to add the options they do want. Combined, the studies support the managerial attractiveness of the subtractive versus the additive option-framing method. Consumers tend to choose more options with a higher total option price when they use subtractive versus additive option framing. This effect holds across different option price levels (Study 1) and product categories of varying price (Study 2). Moreover, this effect is magnified when subjects are asked to anticipate regret from their option choice decisions (Study 2). However, option framing has a different effect on the purchase likelihood of the product category itself, depending on the subject's initial interest in buying within the category. Although subtractive option framing offers strong advantages to managers when product commitment is high, it appears to demotivate category purchase when product commitment is low (Study 3). In addition, the three studies reveal several other findings about the attractiveness of subtractive versus additive option framing from the standpoint of consumers and managers. These findings, in turn, offer interesting public policy and future research implications.
Differences in opt-in and opt-out responses are an important element of the current public debate concerning on-line privacy and more generally for permission marketing. We explored the issue empirically. Using two on-line experiments we show that the default has a major role in determining revealed preferences for further contact with a Web site. We then explore the origins of these differences showing that both framing and defaults have separate and additive effects in affecting the construction of preferences.
The development and validation of measures to assess multiple dimensions of consumer self-confidence are described in this article. Scale-development procedures resulted in a six-factor correlated model made up of the following dimensions: information acquisition, consideration-set formation, personal outcomes, social outcomes, persuasion knowledge, and marketplace interfaces. A series of studies demonstrate the psychometric properties of the measures, their discriminant validity with respect to related constructs, their construct validity, and their ability to moderate relationships among other important consumer behavior variables. Copyright 2001 by the University of Chicago.
We argue that a way culture influences decisions is through the reasons that individuals recruit when required to explain their choices. Specifically, we propose that cultures endow individuals with different rules or principles that provide guidance for making decisions, and a need to provide reasons activates such cultural knowledge. This proposition, representing a dynamic rather than dispositional view of cultural influence, is investigated in studies of consumer decisions that involve a trade-off between diverging attributes, such as low price and high quality. Principles enjoining compromise are more salient in East Asian cultures than in North American culture, and accordingly, we predict that cultural differences in the tendency to choose compromise options will be greater when the decision task requires that participants provide reasons. In study 1, a difference between Hong Kong Chinese and North American participants in the tendency to select compromise products emerged only when they were asked to explain their decisions, with Hong Kong decision makers more likely and Americans less likely to compromise. Content analysis of participants' reasons confirmed that cultural differences in the frequency of generating particular types of reasons mediated the difference in choices. Studies 2 and 3 replicate the interactive effect of culture and the need to provide reasons in a comparison of North American versus Japanese participants and in a comparison of European-American and Asian-American participants, respectively. Studies 4 and 5 found that Hong Kong Chinese participants, compared with Americans, evaluate proverbs and the reasons of others more positively when these favor compromise. We discuss the value of conceptualizing cultural influences in terms of dynamic strategies rather than as dispositional tendencies.
This article examines conditions that influence consumers' use of persuasion knowledge in evaluating an influence agent, such as a salesperson. We propose that persuasion knowledge is used when consumers draw an inference that a persuasion motive may underlie a salesperson's behavior. These motive inferences then affect perceptions of the salesperson. We propose that two factors, the accessibility of persuasion motives and the cognitive capacity of the consumer, affect whether consumers use persuasion knowledge. When an ulterior persuasion motive is highly accessible, both cognitively busy targets and unbusy observers use persuasion knowledge to evaluate the salesperson. When an ulterior motive is less accessible, cognitively busy targets are less likely to use persuasion knowledge, evaluating the salesperson as more sincere than are cognitively unbusy observers. Several experiments find support for the predictions. Copyright 2000 by the University of Chicago.
Consumers sometimes treat trivial attributes as though they were critically important in the sense that they have a significant impact on choice. We propose a reasons-based account to explain the valuation of trivial attributes and in particular why valuation is in some cases positive and in others negative. We suggest that consumers treat trivial attributes as though they had value when such valuation is instrumental, that is, helps accomplish a task goal. The valence of the effect can depend on whether a positive or negative reason provides a clearer justification for preferring a single brand over its competitors. Thus the same trivial attribute can generate a positive or negative valuation depending on the choice setting. Such valuation is not always driven by inferences about the attribute itself but can reflect transitory reasoning about the brand as a whole, based on the way it is differentiated from its competitors. Results from two experiments support the reasons-based model and help resolve some apparently conflicting effects previously reported for trivial attributes. Copyright 2000 by the University of Chicago.
It has recently been suggested that a number of experimental findings of context effects in choice settings can be explained by the ability of subjects to draw choice-relevant inferences from the stimuli. We aim to measure the importance of this explanation. To do so, inferences are assessed in an experiment using the basic context-effect design, supplemented by direct measures of inferred locations of available products on the price-quality Hotelling line. We use these measures to estimate a predicted context effect due to inference alone. For our stimuli, we find that the inference effect accounts for two-thirds of the average magnitude of the context effect and for about one-half of the cross-category context-effect variance. Copyright 1997 by the University of Chicago.
In this article we examine whether and why preferences for a good produced by its mere and arbitrary possession (i.e., a mere-possession effect) occurs even in the absence of actual possession. In two experiments, we demonstrate that merely possessing a coupon for a product, as opposed to the actual product, can increase consumers' preference for that option over its competitors' in real choices from meaningfully comparable choice sets. In addition, a characterization of the cognitive processes underlying this phenomenon, and its variation with individual perceptions of task meaningfulness, provides support for a loss-aversion account of consumers' possession-induced preferences for goods they do not actually possess. Copyright 1997 by the University of Chicago.
This article explores the possibility that consumers use market data to make inferences about product utilities. The argument is made by means of an example based on the "compromise effect" found in extant experimental data. This phenomenon is generally looked at as a manifestation of deviations from rationality in choice. However, assuming full rationality, I describe a decision rule that is based on consumers' inferences about their information about their own relative tastes. Through a number of examples, I will argue that consumers often use this or similar decision rules to make inferences about utility. I then show that the decision rule may generate compromise effects in experiments and that it may be sustainable. The compromise effect could therefore be seen as preliminary evidence that consumers make such inferences. Copyright 1995 by the University of Chicago.
It is proposed that motivation may affect reasoning through reliance on a biased set of cognitive processes--that is, strategies for accessing, constructing, and evaluating beliefs. The motivation to be accurate enhances use of those beliefs and strategies that are considered most appropriate, whereas the motivation to arrive at particular conclusions enhances use of those that are considered most likely to yield the desired conclusion. There is considerable evidence that people are more likely to arrive at conclusions that they want to arrive at, but their ability to do so is constrained by their ability to construct seemingly reasonable justifications for these conclusions. These ideas can account for a wide variety of research concerned with motivated reasoning.
Unlike many models of bias correction, our flexible correction model posits that corrections occur when judges are motivated and able to adjust assessments of targets according to their naive theories of how the context affects judgments of the target(s). In the current research, people flexibly correct assessments of different targets within the same context according to the differing theories associated with the context-target pairs. In Study 1, shared theories of assimilation and contrast bias are identified. Corrections consistent with those theories are obtained in Studies 2 and 3. Study 4 shows that idiographic measures of theories of bias predict the direction and magnitude of corrections. Implications of this work for corrections of attributions and bias removal in general are discussed.
A wine-loving economist we know purchased some nice Bordeaux wines years ago at low prices. The wines have greatly appreciated in value, so that a bottle that cost only 200 at auction. This economist now drinks some of this wine occasionally, but would neither be willing to sell the wine at the auction price nor buy an additional bottle at that price. Thaler (1980) called this pattern—the fact that people often demand much more to give up an object than they would be willing to pay to acquire it—the endowment effect. The example also illustrates what Samuelson and Zeckhauser (1988) call a status quo bias, a preference for the current state that biases the economist against both buying and selling his wine. These anomalies are a manifestation of an asymmetry of value that Kahneman and Tversky (1984) call loss aversion—the disutility of giving up an object is greater that the utility associated with acquiring it. This column documents the evidence supporting endowment effects and status quo biases, and discusses their relation to loss aversion.
The authors propose that the attractiveness and choice probability of an alternative can be enhanced by making it the focus of a comparison (the focal option) with a competing alternative. This proposition is supported in choice problems involving alternatives about which consumers have information in memory (e.g., frozen yogurt and fruit salad). The focal option was manipulated by asking respondents how much more or less attractive one of the two (e.g., fruit salad) was. When descriptions of alternatives' features were provided rather than retrieved from memory, a manipulation of the focal option had a weaker and less consistent effect on preferences. Think-aloud protocols were used to gain insights into the effect of changing the focal option on decision processes. The implications of the results for marketers' communications strategies are discussed.
Consumers develop over their life span a pragmatic expertise in marketplace metacognition and marketplace interactions. Marketplace metacognition and social intelligence refer to people's beliefs about their own mental states and the mental states, strategies, and intentions of others as these pertain directly to the social domain of marketplace interactions. Drawing from the recent study of evolutionary psychology, theory of mind, multiple life-span intelligences, and everyday persuasion knowledge, I discuss the importance to our field of studying marketplace metacognition and social intelligence and of research-based consumer education programs on those topics.
The effectiveness of any promotional strategy depends, in part, on how accurately channel members predict consumers’ perceptions of their promotional activity. However, empirical research on channel member predictions and their accuracy is virtually nonexistent. In this article we examine manufacturer and retailer beliefs about consumers’ (and each others’) perceptions of sales promotions and assess the accuracy of these predictions. Our findings indicate that manufacturers and retailers hold similar, but equally inaccurate views of consumers’ industry knowledge. When assessing consumers’ specific beliefs about different types of promotions, these channel members underestimate consumer knowledge. Their motivational knowledge, however, appears quite accurate -whether predicting consumer or other channel member perceptions of motivations. The similarity of supplier and retailer knowledge bodes well for channel efficiency, yet limitations in their understanding of consumer knowledge about promotions may lead to weakness in channel marketing strategies.
In theories and studies of persuasion, people's personal knowledge about persuasion agents' goals and tactics, and about how to skillfully cope with these, has been ignored. We present a model of how people develop and use persuasion knowledge to cope with persuasion attempts. We discuss what the model implies about how consumers use marketers' advertising and selling attempts to refine their product attitudes and attitudes toward the marketers themselves. We also explain how this model relates to prior research on consumer behavior and persuasion and what it suggests about the future conduct of consumer research. Copyright 1994 by the University of Chicago.
This paper estimates the risk preferences of cotton farmers in Southern Peru, using the results from a multiple-price-list lottery game. Assuming that preferences conform to two of the leading models of decision under risk--Expected Utility Theory (EUT) and Cumulative Prospect Theory (CPT)--we find strong evidence of moderate risk aversion. Once we include individual characteristics in the estimation of risk parameters, we observe that farmers use subjective nonlinear probability weighting, a behavior consistent with CPT. Interestingly, when we allow for preference heterogeneity via the estimation of mixture models--where the proportion of subjects who behave according to EUT or to CPT is endogenously determined--we find that the majority of farmers' choices are best explained by CPT. We further hypothesize that the multiple switching behavior observed in our sample can be explained by nonlinear probability weighting made in a context of large random calculation mistakes; the evidence found on this regard is mixed. Finally, we find that attaining higher education is the single most important individual characteristic correlated with risk preferences, a result that suggests a connection between cognitive abilities and behavior towards risk.
Anchoring is a pervasive judgment bias in which decision makers are systematically influenced by random and uninformative starting points. While anchors have been shown to affect a broad range of judgments including answers to knowledge questions, monetary evaluations, and social judgments, the underlying causes of anchoring have been explored only recently. We suggest that anchors affect judgments by increasing the availability and construction of features that the anchor and target hold in common and reducing the availability of features of the target that differ from the anchor. We test this notion of anchoring as activation in five experiments that examine the effects of several experimental manipulations on judgments of value and belief as well as on measures of cognitive processes. Our results indicate that prompting subjects to consider features of the item that are different from the anchor reduces anchoring, while increasing consideration of similar features has no effect. The anchoring-as-activation approach provides a mechanism for debiasing anchoring and also points to a common mechanism underlying anchoring and a number of other judgment phenomena.
The status quo bias as described by Samuelson and Zeckhauser (1988) can be decomposed into two primary effects-an exaggerated preference for the current or previous state of affairs and an exaggerated preference for inaction. We describe an experiment designed to disentangle these effects. Analysis of results shows that both effects can occur, they appear to be additive, and subjects exhibit these effects unknowingly. These effects relate to and may interact with loss aversion, ambiguity, and regret. (C) 1994 Academic Press, Inc.
A Rational Reconstruction of the Compromise Effect
- Birger Wernerfelt
Wernerfelt, Birger (1995), "A Rational Reconstruction of the Compromise Effect," Journal of Consumer Research, 21 (March),
627-33.
Obtaining Robust Variance Estimates
Stata Corporation (2001), "Obtaining Robust Variance Estimates,"
in Stata User's Guide, College Station, TX: Stata,
U254-U258.