The Impact of Counterfactual Thinking on Persuasion

1. The Impact of Counterfactual Thinking on Persuasion Kai-yuwang, ph.d. goodman school of business, brock university, Canada National university of Kaohsiung, March 13, 2014

2. What is Counterfactual Thinking? • Counterfactual thinking (CFT) - a mental process that simulates possible routes or measures to negate what has happened. • “if only I had chosen that number, I would have been a millionaire now” • “if only I had taken a different route to the airport the other day, I would have not been caught in the traffic, missed my flight, and wasted one day time at the airport.” • Counterfactual thoughts can account up to 12% of all the thoughts occurred to our mind on a daily base (Summerville & Roese, 2008).

3. What is Counterfactual Thinking? Upward: Generate alternatives that are better than actuality (could have made things better). If only I wake up earlier, I would not get in the traffic jam. Content Downward: Generate alternatives that are worse than actuality (things could have been worse). At least I still get a seat in the next flight. Additive: Thoughts in which people wish they could add an action to reality. If only I had set the alarm, I would not oversleep. Structure Subtractive: Thoughts in which people wish they could remove an action from reality. If only I had not come home late last night, I would not oversleep.

5. If only I had purchased a TV with an extended warranty, I would not have to spend so much money on this repair. --Upward counterfacutals At least, I did not purchase the model with the longer warranty and smaller screen, because I enjoy my large screen TV. --Downward counterfactuals

6. If only I had purchased the SONY TV, I would have enjoyed the excellent customer service. --Additive counterfacutals If only I have not purchased the Toshiba TV, I would not now bear with the poor customer service. --Subtractive counterfactuals

7. CFTResearch Papers • Wang, K., Liang, M. and Peracchio, L. Strategies to Offset Dissatisfactory Product Performance: The Role of Post-purchase Marketing, Journal of Business Research. Volume 64, Number 8, August, 2011. • Wang, K., Yang, X. and Jain, S. Negative Consumption Episodes, Counterfactuals and Persuasion - Association for Consumer Research Annual Conference, Vancouver, British Columbia, October, 2012. • Wang, K. and Zhao, G. Counterfactual Thinking and Consumers’ Preference for Product Feasibility - American Marketing Association Winter Marketing Educators’ Conference, Orlando, Florida, February, 2014. • Wang, K., Bublitz, M. and Zhao, G. Counterfactual Thinking and Consumers’ Health Choices and Behaviors- working paper, 2014.

8. The Impact of Counterfactual Thinking on Postpurchase Evaluation Kai-Yu Wang, BrockUniversity, Canada Minli Liang, SUNY-Brockport Laura A. Peracchio, University of Wisconsin-Milwaukee

10. Introduction “There is nothing either good or bad, but thinking makes it so.” Shakespeare • Focus of Research • Examine how CFT influences people’s product evaluations after a satisfying or dissatisfying purchase experience. • Explain the process underlying the formation of evaluations.

11. Research Questions • How and when does CFT influence consumers’ product evaluations after experiencing product satisfaction or dissatisfaction? • Does motivation provide a potential boundary condition for the negative cycle of upward CFT? • What is the process underlying the formation of product evaluations?

12. CFT and Outcome Valence • Positive outcome: more downward counterfactuals + greater satisfaction • Negative outcome: more upward counterfactuals + greater dissatisfaction. (Roese, Sanna, and Galinsky, 2005; Schwarz and Bless, 1992; Markman et al., 1999)  downward counterfactuals   upward counterfactuals  The latter situation could turn out a negative cycle.

13. The Moderating Role of Motivation • Upward CFT might be inhibited in order to change negative affect, but only when people have more ability or resources to overcome upward CFT and engage in downward CFT(Roese et al. 2005; Taylor 1991). • Motivation/NFC • Positive outcomes do not motivate people to expend cognitive effort processing information unless called for by other goals (Schwarz 1990; Bless, Bohner, Schwarz, and Strack 1990).

14. Overview of Two Studies • Study 1 investigates whether higher motivation can break the reciprocal cycle of upward CFT when people encounter a negative purchase outcome and explores the effects that underlie this process. • Study 2 provides an extension of study 1 and establishes the robustness of the documented findings. A follow-up customer survey replaced the CFT instruction to induce participants to engage in CFT.

15. Study 1: Method • Participants: 113 students • Procedure • Each was randomly distributed a survey booklet. • First viewed one of the two versions of computer purchase scenarios. • Each was provided with one of the two instruction sets • Completed NFC items. • Evaluated the Product (not useful/useful, unappealing/appealing, not easy to use/easy to use, not excellent value/excellent value, and not a worthwhile purchase/a worthwhile purchase). • Wrote down thoughts that occurred to them during the purchase experience.

16. Product Evaluation:Purchase Outcome x Thinking Instruction x NFC 5.43 5.23 5.10 * 4.60 5.28 5.06 * 4.27 3.54

17. Study 2: Overview • Contribution: • Replicate study 1 and further explore the process that underlies these effects. • Purpose: • Bring research into a more naturalistic marketing context. • Investigate whether a follow-up customer survey can induce customers to think counterfactually. • Research Design: 2 x 2 • Thinking Instruction: follow-up survey vs. no follow-up survey • Motivation: high vs. low • Dependent variables: Product evaluations and Thoughts

18. Motivation • High-processing-motivation condition • Participants were informed that they were part of a small group of people participating in the study. Their opinions were extremely important to the company represented in the survey. • Low-processing-motivation condition • They were told that they were among a large number of students at many universities. Their opinions might be used after aggregating them with those of other students. (Chaiken and Maheswaran 1994; Peracchio and Meyers-Levy 1997)

19. Study 2: Method • Participants: 54 students • Procedure • Similar to the procedure in study 1. • Study 2 differed from study 1 in three ways: • Only the negative-outcome purchase scenario was employed. • The CFT instruction was replaced with a follow-up customer survey. • Respondents’ processing extensiveness (motivation) was manipulated following a procedure used in previous research (Chaiken and Maheswaran 1994; Peracchio and Meyers-Levy 1997).

20. Product Evaluation:Thinking Instruction x Motivation * 4.41 4.49 * * 3.90 3.71

21. Contributions and Applications • Theoretical contributions • Provide evidence that cognitive ability and resources –NFC and motivation— impact the direction of CFT. • Explore the impact of counterfactual thinking on product evaluation. • Explain the process underlying the formation of product evaluations. • Managerial applications • Comment cards and satisfaction surveys • Service/product failure recovery

23. Counterfactual Thinking and Consumers’ Preference for Product Feasibility Kai-yuwang, brock university, Canada Guangzhizhao, Loyola university of Maryland, usa

24. Introduction • Focus of Research • Examine how CFTmight activate a process- (vs. outcome-) focused mindset and influences product choice preference for product attributes (feasibility vs. desirability) following a negative consumption episode in a related/unrelated domain. • Explain the underlying mechanism of the observed effects.

25. CFT Literature Review • Immediate emotional consequences • Regret or happy, depending of the direction of CFT (Markman et al., 1993; Rajagopal et al., 2006). • Downward CFT can make individual feel rejoiced; whereas upward CFT make individuals feel regretful. • Decision-making and behavior • Anticipated counterfactuals: house insurance purchase (Hetts et al., 2000) • Anticipated regret and responsibility: brand and price (Simonson, 1992)

26. CFT Literature Review • Cognitive implications • Prime or activate certain information-processing styles. • Following a negative consumption experience CFT can make consumers more cautious in buying a replacement product (Krishnamurthy & Sivaraman, 2002). • Content-neutral CFT influences: CFT can alter or prime certain cognitive mentality and information-processing styles that influence individuals’ behavior in a domain or context that is detached from and independent of the original CFT experience.

27. CFT Literature Review • Two common dimensions to differentiate CFT(Gleicher et al. 1990; Nan, 2008; Roese & Olson, 1993) • Content: upward vs. downward • Structure: additive vs. subtractive • Upward CFTs are common in consumption context and are especially like to occur when consumers experience negative consumption outcome (e.g., product failure) (Roese, Sanna, & Galinsky, 2005; Wang et al., 2010). • Both additive counterfactuals and subtractive counterfactuals are likely in consumption context. • CFT essentially involves mental simulations of the process of following certain sequences of action, taking certain behavior courses/routs/paths, and performing certain actions to negate a reality.

28. CFT Literature Review • Process-related mental activities: • entails individuals to re-live how an incident happened, figure out which steps went wrong, and • finally come up the necessary steps or alternative courses to negate the incident.

29. Recall the process…

30. Simulate alternatives…

31. CFT Literature Review • Priming certain process-focused cognitive mindsets: • Prime a relational processing style which subsequently makes individuals focus more on relationships and associations between stimuli and boosts individuals’ creativity(Kray et al., 2006). • Problem-solving process CFT on product failure (e.g., failed electricity surge protectors) can lead consumers to extend extra effort to scrutinize claims made about surge protectors in ads and process ad information (Krishnamurthy & Sivaraman, 2002).

32. CFT Literature Review • Two basic routes through which CFT influences individuals (Epstude & Roese, 2008): • content-specific route: • content-neutral route Product failed due to an electricity surge Scrutinize surge protector ad information Buy a book and order a meal in the airport Missing flight

33. Product Feasibility and Desirability • Product feasibility: how easily to operate the product (Goodman & Malkoc, 2012). • (Computer software) Smaller file size, less time to download • Product desirability: the value of owning the product. • (Computer software) Higher product quality rating, a complete set of features • Feasibility is negatively, but desirability positively, related to the number of product beneficial features (Thompson, et al., 2005).

34. Feasibility or Desirability? • Direct vs. indirect experience (Hamilton & Thompson, 2007) • Product trial vs. reading a product description/ad • Interruption (Goodman & Malkoc, 2012) Feasibility Low/concrete level: “how-to” Construal level theory(Liberman & Trope, 1998) Desirability High/abstract level: “why”

35. Feasibility or Desirability? • Decision time frame: near vs. far future (Zhao et al., 2007) • 1 month vs. 3 months • Consumers’ process- versus outcome-focus mindset can be activated by various market condition factors. One such factor is counterfactual thinking. Process Feasibility Construal level theory(Liberman & Trope, 1998) Outcome (end state) Desirability

36. CFT and Feasibility and Desirability Considerations • CFT often takes the form of a conditional proposition, in which individuals identify alternative routes or processes to mutate factual events. • CFT may activate a process-focused information processing mentality and sensitize individuals to procedural information. • individuals who engage in CFT thinking about “how” things would have turned out differently are more likely to process-focused when they are directed to mutate possible actions in the process in order to alternate outcomes (Liberman, Macrae, Sherman, & Trope, 2007; Trope, Liberman, & Wakslak, 2007). • We expect that CFT individuals construe an activity in a manner of procedural actions.

37. Research Hypotheses After a negative consumption episode, • H1: CFT individuals will weigh product feasibility more heavily than product desirability when making a decision in a subsequent consumption event. They will evaluate a high-feasibility product more favorably than a high-desirability product. • H2: Individuals who do not engage in CFT will weigh product feasibility and desirability equally because both feasibility and desirability considerations should be equally important when making a decision. Their preferences between a high-feasibility product and a high-desirability product should not be different.

38. Method • Study 1 CFT and Action Identifications • Study 2 CFT and Feasibility (vs. Desirability) Considerations in Ad Persuasion • Study 3 CFT and Feasibility (vs. Desirability) Considerations in Choice Preferences • Replicates the findings of study 2 using a choice task with music players and examines the underlying mechanism.

39. Study 1 CFT and Action identifications • Purpose • Test whether CFT influences respondents’ action identifications (procedural vs. ends). • Design • One factor between-subjects design (CFT vs. control) • N= 56 (33 females and 23 males, aged 19-66) recruited through Mturk. • Read a job interview scenario and imagined that they missed a flight for a job interview.

40. Study 1 CFT and Action identifications • Independent • CFT: generate “if only” thoughts (Krishnamurthy & Sivaraman 2002) • Dependent measures • Behavior identification form (BIF): a 25-item dichotomous-response questionnaire (Vallacher & Wegner 1989) • Voting: making a ballot (how to) or influencing the election (ends)? • Results: • CFT individuals had higher preferences for the “how to” action identifications (M = .51) than the control group (M = .40, F (1, 54) = 4.85, p < .05).

41. CFT scenario

42. BIF (Vallacher & Wegner 1989)

43. Study 2 CFT and Feasibility (vs. Desirability) Considerations in Ad Persuasion • Purpose • Investigate whether and how such CFT induced information processing focus influences an individual’s preference for product feasibility and desirability in an ad advertising persuasion setting. • Design • 2 (CFT: CFT vs. control) x 2 (product features: high-feasibility vs. high-desirability) between-subjects factorial design • N= 135 (undergraduate respondents in Canada) • Read a hypothetical missing flight experience episode.

44. CFT scenario

45. CFT scenario

47. Study 2 CFT and Feasibility (vs. Desirability) Considerations in Ad Persuasion • Independent • CFT: generate “if only” thoughts (Krishnamurthy & Sivaraman 2002) • Dependent measures • Ad evaluations ( = .93), product evaluations ( = .91), purchase intentions ( = .86) • Ad focus: product feasibility and desirability • Results: • Manipulation check: The high-feasibility product (M = 5.23) was rated higher than the high-desirability product (M = 4.53, F (1, 133) = 4.58, p < .05) on product feasibility whereas the high-desirability product was rated higher than the high-feasibility product (p < .05) on product desirability.

48. Study 2 Results

49. Study 3 CFT and Feasibility (vs. Desirability) Considerations in Choice Preferences • Purpose • Replicates the findings of study 2 using a choice task with music players and examines the underlying mechanism. • Design • 2 (CFT: CFT vs. control) x 2 (choice features: high-feasibility vs. high-desirability) between-subjects factorial design • N= 171 (undergraduate respondents in a Midwestern State) • Read a hypothetical digital camera consumption scenario. • Looked for a MP3 player with a voice recorder in order to complete a course project.

50. Study 3 CFT and Feasibility (vs. Desirability) Considerations in Choice Preferences • Independent • CFT: generate “if only” thoughts (Krishnamurthy & Sivaraman 2002) • Dependent measures • Product evaluations ( = .92), purchase intentions ( = .94) • Mediator • Importance of product features (easiness to use and simplicity to operate)