Bounded rationality and consumer choice: an evaluation of consumer choice of mobile bundles

Although numerous prior studies have examined consumer valuations in bundling transactions from a theoretical perspective, relatively few have focused on large datasets. In addition, little prior research has targeted developing telecommunication markets. To address these gaps in the literature, we examine the rationality of consumers' bundling choices in the mobile telecommunication industry, using operational data from China Telecom. We compare the current prices paid by consumers to the optimal prices of alternative bundling plans, based on the consumers' actual usage. We determine whether bundling choice is affected by risk aversion, the complexity of the bundle, and learning effects. The findings suggested that many users chose sub-optimal bundles that were more expensive than others were. The results showed that consumers were risk averse, and they were more likely to make non-optimal bundle selections with more complex usage patterns. No significant differences were found according to gender, age, or usage level.     

Role of motives and attributes in consumer motion picture choice

The study focuses on consumer motion picture motives and choice criteria. Its purpose can be specified into the following objectives: (1) to examine the motivational basis of cinema attending. (2) to examine the predictive ability of movie motives and consumers' attribute importances in preference regressions of four types of movie, (3) to carry out a motion picture choice analysis by predicting audience membership with discriminant analysis. The data is based on a convinience sample of Finnish consumers (N = 228) attending one of the following types of movie: adventures/ thrillers, human/ social dramas, sex movies, entertainment movies.The results of a group of multivariate analyses (factor analysis, canonical correlation, preference regression, and discriminant analysis) indicate that consumers attending different types of films have distinctly separate motivation bases, as well as attribute importance profiles, underlying their movie choices. Each movie type had a specific preference structure, expressed by the regression coefficients. Finally, the discriminant analysis suggests that the general motive and attribute variables are effective also in predicting motion picture choice. On balance, the results were mutually supportive and exemplify the managerial usefulness of quantitative consumer analysis also in the case of such abstract leisure products as motion pictures.     

Economic utility versus the attitudinal perspective of consumer choice

Consumer behavior has been extensively researched by economists and social psychologists under the labels of demand theory and attitude theory, respectively. These schools have historically ignored each other's contributions, largely because demand theory has focused on constrained choice while attitude theory has not. However, Warshaw, Sheppard and Hartwick have recently extended attitude theory so that constraints and choice are now endogenous to the model. The points of tangency and distinctiveness between this paradigm and that version of demand theory which is most pertinent to brand choice (i.e., Lancaster economics) are critically discussed, providing a frame of reference for future research at the boundary of economics and social psychology.     

Relative status and interdependent effects in consumer behavior

The current consumer culture, which associates the meaning of life primarily through the consumption of material goods and services, has brought many transformations in U.S. society. The purpose of this study is to examine the relative status and interdependent effects associated with consumer behavior, as developed by economists Veblen, Duesenberry, Frank, and Schor. Using the 2005 Consumer Expenditure Survey, several linear regression models have been conducted on four expenditure items including clothing, entertainment, home furnishings, and automobiles. While controlling for several demographic variables, a consumer's relative expenditure ranking emerges as the strongest substantive factor in determining clothing consumption and number of automobiles owned.     

Efficiency of consumer intertemporal choice under life cycle cost conditions

Many decisions made by consumers are intertemporal. Life cycle cost (LCC) conditions represent a specific type of intertemporal decisions, typically referring to items involving two cost components: present purchase price and future maintenance costs. This paper presents a conceptual framework for analyzing consumer LCC decision making. Within this framework the notion of choice efficiency is highlighted. The main contribution of the study is the direct estimation of consumers’ choice efficiency, as compared to previous studies that estimate only consumers’ implicit discount rates. Effects of situational and personal variables on efficiency of choice are estimated by means of a series of manipulated choice settings. The main empirical findings show situational effects of monetary size, type of object and time horizon. Additional findings show the effect of personal variables such as gender, marital status and education.     

Postpurchase consumer evaluations,complaint actions and repurchase behavior

In this article (1) a model of postpurchase evaluation processes is presented. This model is used as a theoretical framework for explaining different kinds of consumer complaint actions. (2) Several hypotheses regarding consumer complaint behavior (actions) are derived and empirically tested. Additionally, (3) the relation between postpurchase evaluation outcomes and subsequent repurchase behavior is specified.     

Enabling informed consumer choice in the long-term care insurance market.

Provisions in the Health Insurance Portability and Accountability Act of 1996 (HIPAA) may increase private long-term care insurance sales without imposing substantially more stringent consumer-protection features. The ability of consumers to make informed choices when purchasing this complex product is examined in light of these changes. Data were collected through detailed examinations of policies and interviews with industry experts, insurance companies, agents, consumer groups, and regulators. Because of the complexity of this product, the goals of expanding, consumer choice and ensuring that consumers are able to make informed decisions often work against each other. Mechanisms are discussed through which the government can facilitate informed choice and improve consumer protection. The authors contend that, because the government is providing tax incentives that encourage consumers to purchase the product, it has the responsibility to ensure that consumers understand the long-term care insurance they purchase.     

Impulsive consumption and reflexive thought: Nudging ethical consumer behavior

The paper deals with impulsive consumption and highlights the roles that two aspects of reflexive thought (namely self-control and self-image motives) play in intertemporal decisions. While self-control can inhibit individuals from consuming impulsively, self-image motives can induce impulsive consumption. Based on recent neuroscientific findings about ‘wanting’–‘liking’ dissociations, the paper presents the cue-triggered ‘wanting’ mechanism as one potential explanation for the occurrence of such impulsive consumption. Utilizing the knowledge of this mechanism and acknowledging both aspects of reflexive thought, the paper expands on three libertarian paternalistic means to foster an ethical way of impulsive consumption: strengthening willpower, reducing impulsive desires to consume, and guiding impulsive behavior in ethical directions by making salient certain self-images that favor ethical consumption.     

Responses to Scarcity

Studies of pre-industrial societies suggest that in response to protracted scarcity, individuals experience a decline in social relations, return to traditional practices and values, and become more subordinate to those in authority. In this paper, we examine the extent to which these same responses are found in an industrialized area. Evidence from survey data suggests that scarcity and economic decline do decrease social relations and cause some individuals (those with less formal education) to use more traditional means to solve problems, but they do not cause people to become more passive in respect to community leaders. Factors that may account for the different responses to scarcity in industrial and pre-industrial societies are discussed.     

Eyes on the account size: Interactions between attention and budget in consumer choice

The context surrounding a consumer decision, such as one’s overall budget available for purchases, can exert a strong effect on the subjective value of a product. Across three eye-tracking studies, we explore the attentional processes through which budget size influences consumers’ purchasing behavior. Higher budgets increased and sped up purchasing even when items were affordable at all budget sizes. Moreover, attention interacted with budget size to promote purchasing at higher budgets. Finally, individual differences in the magnitude of the budget effect related to attentional patterns: those whose decisions depended more on budget exhibited more budget-price transitions and less variability in search patterns compared to those whose decisions were less dependent on budget. These findings indicate that attention moderates the effect of budgets on purchasing decisions, allowing low budgets to serve as self-control devices and large budgets to generate impulse purchases.     

Self-concept clarity: Exploring its role in consumer behavior

Even two decades later since Self-Concept Clarity (SCC) first emerged in the psychology literature, this important concept has escaped the attention of consumer psychologists. Distinguished in the psychology literature from the concept of self-esteem, our study examines the role of SCC in selected consumer behaviors. A survey of 301 consumers established that SCC contributes to consumers’ general satisfaction with life and its absence leads to such consumer behaviors as susceptibility to interpersonal influence, materialism, post purchase doubt, shopping as escape, and use of products as identity bolsters. This last set of results shows that low SCC consumers, who by definition are inflicted with self-confusion and concomitant anxiety, use the marketplace as a coping resource. These results suggest the concept’s utility in extending our understanding of certain important consumer behaviors.     

Do shared features of offered alternatives have an effect in consumer choice?

Are features shared by alternatives canceled, and is greater weight placed on the unique features in choosing among the alternatives provided? The present article evaluates the possible cancellation operation in terms of pricing and preferential choice and determines whether features shared by competing alternatives affected consumer decisions. This article suggests that features shared by alternatives may be canceled only when the shared features are irrelevant to the unique features and that shared features that are relevant do matter. Implications of the cancellation-and-focus model of choice and its relation to the equate-to-differentiate model of choice are discussed.     

The role of affective choice mode in the consumer purchase of expressive products

Based on Zajonc's (1980) thesis, a concept of Affective Choice Mode is developed. It is argued that when products are expressive (i.e., they are sought for psycho-social goals rather than for utilitarian goals), then the predominant mode of consumer brand selection is the affective choice mode. This mode is contrasted with the traditionally assumed information processing mode. Using survey data from 192 consumers and employing LISREL analyses it is shown that (a) although involvement leads to information processing, (b) expressiveness makes affective choice mode more likely, which in turn (c) suppresses information processing. Research and managerial implications of the present work are discussed.     

Theoretical progress in consumer psychology: The contribution of a behavioural analysis of choice

The dominant paradigm for consumer research in the context of marketing is cognitive information processing. Its fundamental assumption is that observable behaviour is preceded by intrapersonal mental events which also serve to explain that behaviour. Radical behaviourism has been misinterpreted and misrepresented by consumer researchers who have adopted a cognitively-based mode of explanation to the exclusion of all others. This article asks how scientific progress is possible in consumer psychology, given the preeminence of this explanatory mode. It argues that prevailing explanations should be subjected to a rigorous critique based upon contrasting assumptions about the causes of behaviour found in alternative perspectives. Attention is drawn to the contribution which radical behaviourism can make and its role is illustrated by reference to the explanation of consumer innovativeness.     

Effect of recent economic experiences on consumer dreams, goals and behavior in the United States

The paper examines the effect of subjective economic experience on consumer behavior in the U.S. The empirical effort uses survey data from a national mail sample. Consumer behavior is seen to reflect two kinds of orientations - a strategic and a tactical one - and the analysis supports the effect of changing economic environment only on tactical orientations, as hypothesized.     

Explaining consumer confidence in Portugal

Confidence in general and consumer confidence in particular are subject to increasing interest by many agents, including central banks and governments at the national level, and supranational entities, such as the European Commission of the European Union. Although the academic community shares this interest, the extant literature focuses on the use of consumer confidence to predict variables that describe aspects of the business cycle, such as consumption. Unlike this body of work, the objective of our paper is to analyse the evolution of consumer confidence in Portugal and examine the factors that underpin its formation. Using monthly and quarterly data over the period January 1987 to December 2009, we find that consumer confidence in Portugal is essentially explained by the economic performance, the entrance in the Euro zone and electoral circumstances.