The Role of Desires in Sequential Impulsive Choices

1. The Role of Desires in Sequential Impulsive Choices Presented by Mahesh Gopinath Paper with Utpal M. Dholakia, Rice University Richard P. Bagozzi, University of Michigan, Ann Arbor. Dean’s Research Seminar Old Dominion University October 7, 2005

2. Background • Sequential Decision making • Multiple decisions within a short, contiguous time-frame • Interdependent decisions (Dhar & Simonson, 1999) • Shopping trips or sessions (Dhar, Huber, & Khan, 2004) • Managerial decisions • Impulsive choices • Selection of an unplanned option (Rook & Fisher, 1999) • Question: How does a first impulsive choice influence a second impulsive choice?

3. Sequential Decision Making:BACKGROUND CONTRAST EFFECT • Background contrast effects (Simonson & Tversky, 1992; Priester, Dholakia & Fleming, 2004) • Tradeoff values between attributes in a first choice serve as a frame of reference for tradeoff values in later choice tasks First Choice: $3.50/ 100 grams or $4.50/120 grams First Choice: $7.50/ 300 grams or $8.50/500 grams Second Choice: $5.00/ 150 grams or $7.00/210 grams

4. Sequential Decision Making: HIGHLIGHTING • Highlighting (Dhar & Simonson, 1999) • Sequential choices are made using the same criteria as the prior choice • When consumer frames task as a tradeoff between a goal (e.g., enjoyment) and a resource (e.g., money) From Dhar & Simonson, 1999

5. Sequential Decision Making:BALANCING • Balancing (Dhar & Simonson, 1999) • Opposing criteria used in the sequential choice • When consumer frames task as tradeoff between two opposing goals (pleasure and health)

6. Sequential Decision Making:SHOPPING MOMENTUM EFFECT • Dhar, Huber, and Khan 2004 • Initial purchase provides a psychological impulse – momentum drives purchase of second, unrelated product • Illustration: (taken from Dhar et al. working paper)

7. Sequential Decision Making • Another possibility: Consider the role of motivation explicitly • Consumer’s motivational state may be influenced through the initial decision making process • Relevant for impulsive choices which are driven by desires (Hoch & Loewenstein, 1991) • Recent work on self-regulation (e.g., Muraven, & Baumeister, 2000)

8. Sequential Impulsive Choices • Impulsive choice: option chosen deviates from one that the decision maker planned on choosing, or usually chooses • Driven by desires since it involves deviation from plan or habit (“urges”, “cravings”, etc.) • Separation in time between choosing and acting • Emphasizes decision implementation • We study unrelated choices – second choice is in a different category or domain than the first choice

9. Sequential Mitigation Effect • “Merely participating in a prior impulsive choice reduces impulsiveness of choice in the subsequent task” • Specific mechanism hypothesized: sequent choice task musters a lower level of desire on account of having participated in a prior impulsive choice beforehand

10. Hypothesis • When sequential impulsive choices are desire-driven, participation in a prior impulsive choice will reduce the intensity of desire experienced for the impulsive option(s) in the subsequent choice, leading to a reduced likelihood of choosing impulsively – Sequential mitigation effect (SME)

11. Experiment One: SME Demonstration • N = 132 • Single choice (“gourmet sandwich” scenario alone) or Two choices (“sweater” followed by “gourmet sandwich” scenario) conditions • Dependent measures: desire to buy and likelihood of buying

12. Experiment One: Scenarios • Sweater scenario: “Imagine that you have gone to the mall to buy a few pairs of socks. As you are walking through the mall, your eyes fall upon a fashionable and attractive sweater. It happens to be in your size and favorite color. The salesperson tells you that the piece on display is the last one left, and they are unlikely to get more of the sweaters in this particular style in the future.” • Gourmet sandwich scenario: “Imagine that you have gone to a cafeteria to get a healthy and nutritious salad for lunch. As you are looking through the display case while standing in line, you see a special gourmet sandwich.”

13. Experiment One Results Correlation between desire for first and second impulsive choice For all respondents = .10 For those with high desire (5 or more) in first task = -.30 Correlation between purchase likelihoods For all respondents = .22 For those with high desire (5 or more) in first task = -.10

14. Experiment Two: Conceptual Replication • N = 76 • Single choice (“cheesecake” scenario alone) or Sequent choice (“sweater” followed by “cheesecake”) conditions • Dependent measure: Participant’s choice in cheesecake scenario

15. Sweater Scenario “ “Ms. A is a 22-year old college student with a part-time job. It is two days before she gets her next paycheck and at present, she has only $25 left for necessities in her bank account. In addition, she does have two credit cards that she often uses. Today, Ms. A needs to buy a pair of warm socks for an outdoor party coming up this weekend. After a busy and productive morning at work, she goes with her friend Ms. B to the mall to purchase the socks. As they are walking through Kaufman’s, Ms. A sees a great looking sweater on sale for $75. The sweater is of a style that she has wanted to buy for a long time, and is in her favorite color. The helpful salesperson tells Ms. A that they have just one piece left in her size, and it is unlikely that they will get more pieces in this style in the future.”

16. Sweater Scenario Choices • buy the socks only; not even think about the sweater, • buy the socks only, want the sweater but not buy it, • decide not to buy the socks and buy the sweater instead, • buy both the sweater and the socks with a credit card, • buy both the socks and the sweater plus matching slacks and a shirt to complete the outfit.

17. Cheesecake Scenario “Ms. A is a 22-year old college student. She enjoys exercising and running and likes to eat health food, and generally eats a healthy salad for lunch. On a weekday, after a busy and productive morning at work, she goes to the mall with her friend, Ms. B, to buy a pair of socks. Walking though the mall, she passes Spizio’s, her favorite deli, in the food-court. As she is looking though the display, she sees a mouth-watering tray of strawberry cheesecake, her favorite dessert and feels a strong craving for it immediately.”

18. Cheesecake Scenario Choices • buy the healthy and low-calorie salad for lunch, not even think about the cheesecake, • buy the healthy and low-calorie salad for lunch, want the cheesecake but not buy it, • decide not to buy the salad and buy the cheesecake instead, • buy both the salad and the cheesecake, • buy both the salad and the cheesecake plus a chicken sandwich to complete the meal.

19. Experiment Two Results

20. Experiment Three: Replication in Non-Purchase Domain • N = 180 • Single choice (“charity” scenario alone) or Two choices (“weekend” followed by “charity”) conditions • Dependent measures: desire to give, likelihood of giving, and dollar amount contributed

21. Experiment Three: Scenarios • Weekend Scenario: “Imagine that on a particular Friday, you have planned to spend the evening relaxing and catching up on chores. Around 7 p.m., your friend calls and invites you to go out with a group of your friends.” • Charity Scenario: “Imagine that you have received a tax refund of $500 from the IRS (Internal Revenue Service). A few days later, you unexpectedly get a letter from a well-known charitythat you have donated to in the past, seeking contributions from you.”

22. Experiment Three Results

23. Explaining the SME • Limited resource perspective (Muraven, Baumeister, and colleagues) • Desire is a limited resource • When experienced the first time, it is depleted • Influence of the prior choice will be through the decision maker’s ability to experience desire for the impulsive option again in the second task • Motivational context effect

24. Experiment Four: Need to Make Impulsive Prior Choices • N = 103 • 3 conditions: single choice (sweater alone), impulsive choices (two impulsive scenarios, then sweater), non-impulsive choices (two non-impulsive scenarios, then sweater) • Dependent measures: desire and purchase likelihood for items

25. Experiment Four: Impulsive Choices Scenarios • Cheesecake Scenario: “Imagine that you have gone to a cafeteria to get a healthy and nutritious lunch. As you are looking through the display case while standing in line, you see a mouth-watering tray of strawberry cheesecake.” • MP3 player Scenario: “Imagine that you have gone to a web-site to buy a music CD. As you are surfing through the website, you come across a newly-introduced MP3 player, which you currently do not own. It has a lot of useful features such as a 20 gigabyte storage capacity, 12 hour battery life, and a one-year warranty.”

26. Experiment Four: Non-Impulsive Choices Scenarios • Cheesecake Scenario: “Imagine that you have gone to the cafeteria for lunch see the following two desserts in the display case. Dessert A: Slice of strawberry cheesecake Dessert B: Slice of key lime pie” • MP3 player Scenario: “Imagine that you are surfing on a website, you come across the following two MP3 players”

27. Experiment Four: Focal Sweater Scenario • Imagine that you have gone to the mall to buy a few pairs of socks.As you are walking through the mall, your eyes fall upon a fashionable and attractive sweater. It happens to be in your size and favorite color. The salesperson tells you that the piece on display is the last one left, and they are unlikely to get more of the sweaters in this particular style in the future.

28. Experiment Four Results

29. Sensitivity to Positive & Negative Outcomes • Another test of why the SME occurs • Manipulate or measure factors that directly influence intensity of desire experienced by decision maker in second task, see if SME is impacted • Sensitivity to positive or negative outcomes (Carver & White, 1994; Higgins, 1999) • Positive outcome sensitivity – counteract depletion of desire – SME will be mitigated • Negative outcome sensitivity - SME heightened

30. Experiment Five • 190 undergraduate students • 2 Group (single choice, two choices) X 2 Outcome sensitivity (positive, negative) • Outcome sensitivity manipulated by emphasizing either potential gains or losses to participants • Dependent measure: Participant’s choice in cheesecake scenario

31. Experiment Five: Outcome Sensitivity Manipulation • Positive outcome sensitivity: “She thinks of the cheesecake’s delicious taste, and the wonderful feeling she will get, if she eats the strawberry cheesecake.” • Negative outcome sensitivity: “She thinks of the large number of calories she will consume, and of all the long workouts she will have to do, to lose them, if she eats the strawberry cheesecake”

32. Experiment Five: Manipulation Checks • “The scenario described the positive consequences of choosing impulsively” • Mp-o-s = 3.02 vs. Mn-o-s = 2.71 • “The scenario described the negative consequences of choosing impulsively” • Mp-o-s = 2.43 vs. Mn-o-s = 2.82

33. Experiment Five Results 4 3.8 3.50 3.6 Positive outcome sensitivity 3.42 3.4 3.2 Average impulsivity of focal choice in cell 3 2.86 2.8 Negative outcome sensitivity 2.6 2.4 2.2 2.20 2 One Choice Two choices

34. Experiment Six • Data collected through kiosk-based computer systems in prominent malls in six US cities • 1,025 mall shoppers (54.3% male, 18-69 years of age, Under $10K to over $100K income) • Four conditions • Sweater first, then cheesecake • Cheesecake first, then sweater • Cheesecake only • Sweater only • Gender-specific versions of scenarios

35. Experiment Six • Goal was to measure the consumer’s sensitivity to positive or negative outcomes • Limited items could be administered • Chose 3 items each from the BIS and BAS scales (Carver & White, 1994) as measuring sensitivity to positive and negative outcomes • BIS – Behavioral Inhibition System – measures individual’s chronic sensitivity to negative outcomes • BAS – Behavioral Activation System – measures individual’s chronic sensitivity to positive outcomes

36. Experiment Six • Positive Outcomes • When I get something I want, I feel excited and energized • When I am doing well at something, I love to keep at it • When I see an opportunity for something I like, I get excited right away. • Negative Outcomes • If I think something unpleasant is going to happen, I get pretty “worked” up • I feel pretty worried or upset when I think or know that somebody is angry at me • I worry about making mistakes

37. 3.4 3.20 Positive Outcome Sensitivity 3.18 3.2 3.06 3 Negative Outcome Sensitivity 2.8 Average Impulsiveness of Focal Choice in Cell 2.6 2.46 2.4 2.2 2 One Choice Sequent Choice Average impulsiveness of focal choice for cheesecake scenario by group and outcome sensitivity, Experiment Six

38. 3 Positive Outcome Sensitivity 2.95 2.89 2.9 2.85 2.8 2.7 Negative Outcome Sensitivity 2.6 Average Impulsiveness of Focal Choice in Cell 2.5 2.4 2.3 2.27 2.2 2.1 2 One Choice Two Choices Average impulsiveness of focal choice for sweater scenario by group and outcome sensitivity, Experiment Six

39. Summary of Research and contributions • Show a motivational context bias to add to extensive literature on cognitive context biases • Study impulsive sequential choices applicable to variety of domains • Interesting extension to study interactions with self-control

40. Questions? Thank you