The Consumption Experience

MAR 3503

March 15, 2012

The paradox of choice

• Our options are ever increasing– In products: 19 different kinds of Hershey’s Kisses

have been on the market; 24 kinds of Oreos– In careers: College education allows people to

consider careers inaccessible 30 years ago– In love: Relationships that aren’t given a second

thought today would have been unthinkable to our grandparents

Is choice a good thing?

• When asked, people believe that more options is better– Free society implies the freedom to choose– Everything in life is a choice• Some choices are ingrained and so no longer seem to

be a choice• Some seem to be unimportant or irrelevant

– These choices are implicit and psychologically unreal

Is choice a good thing?

• Implicit choices make our lives easier—can you imagine explicitly making every choice we encounter during the day?

• The increase in number of choices is turning some formerly implicit choices into explicit and burdensome ones

• Each individual choice is not bad—it is the cumulative effect that leads to problems

• Some argue we are trapped in “the tyranny of small decisions”

Is choice a good thing?

• Even big choices are often threatening or burdensome– 65% of people say they would like to choose the

course of cancer treatment before they are diagnosed, but only 12% wish to choose after diagnosis

– As the number of mutual funds in a 401(k) plan goes up, the rate of participation goes down, even when employers match funds• 10 more mutual funds = 2% less participation

Number of options• Alternatives– While it seems like choosing from a larger array of choices

should lead to better decisions, it appears that choosing from smaller arrays actually leaves people happier with their choice

– For example, a study done at Stanford showed that people who taste 6 different jams are happier with their favorite flavor of jam and are more likely to buy that type of jam or any jam than those who taste 24 different jams

– People are happier and actually write better papers when they are given a small number of topics to choose from than a large number

– People are happier with a chocolate when they choose it from an array of 6 chocolates than when they choose from an array of 30

Number of options

• It appears that a larger number of alternatives leads to more regret with the final choice

• The quality of the top two or three options can be much closer than in a smaller array– “Out of 24 jams, there must have been one at least equally

as good as the one I chose.”• The options you did not choose are much more

salient yet less distinguishable when the array is larger

• The pressure to make a good choice is also greater with a large choice set

Adaptation

• As have seen, people inevitably adapt to their experiences over time– Sensory experiences– Personal experiences– States of being

• But you can reduce how much adaptation occurs or has an impact on your experience

Stupid commercials!

• People believe that commercials make you enjoy a TV show less

• Half predicted how they would enjoy a TV show with or without them, half actually experienced it and reported how they feel– Half watched a TV show with commercials, half

watched the same show without them• Measured actual enjoyment or predicted

enjoyment

Commercials help!

Nelson, Meyvis, & Galak, 2009

Remembering variety

Remembering variety

Galak, Redden, & Kruger, 2009

Participants enjoy the jelly beans more when they remembered a variety of other jelly beans. Remembering variety seems to reduce even physiological satiation.

Imagined satiety

Morewedge, Huh, & Vosgerau, 2010

Unexplained events

Beer preferences

Lee, Frederick, & Ariely, 2006

Names matter

• Asiago Roast Beef Panini

• Early Spring Market Vegetables

• New York Style Cheesecake

• Refreshing White Grape Spritzer

• Roast Beef Sandwich

• Vegetable Medley

• Cheesecake

• White Grape Juice

“Labels” matter

More expensive pain meds work better

• Placebo effects are well-known• Money can be a placebo, too– People feel more relief from seasonal colds when

they use name-brand medicines than when they use discounted ones

– Almost all participants feel pain relief from a “pain-relief medicine” that costs $2.50 a dose, but only half do from a pill that costs $.10 a dose

– Participants who drink a full-price SoBe drink are able to solve more anagrams than participants who drink a discounted SoBe• This is especially true when the drink’s “brain-boosting”

properties were emphasized

Expensive wines taste better

Absolute experience is relative

Absolute experience is relative

Absolute experience is relative

Which would taste better?

Which would taste better?

Were you right?

Normal pace Slow pace

Morewedge et al., 2010

Summary

• Experience is not absolute– The same product can lead to different psychological

and physiological reactions• We enjoy things for reasons we may not

anticipate– Many seeming or normatively irrelevant factors

influence our enjoyment of the things we consume• Other options• A product’s name• A product’s price• How sated we are

Next time…

• What happens after we make a choice?