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Abstract:
Consumer choice occurs over multiple products and services, each comprising multiple risks. In this paper, we present a new market research technique to measure consumers' preferences over large spaces of risks. We first describe the method, present its psychological and analytical motivation, and then report the results of empirical tests of reliability and validity, both within testing sessions and across the span of one year. The method is used to estimate the coefficient of relative risk aversion and the loss aversion parameter for a sample of adults saving for retirement. The new technique passes tests of reliability and validation and captures individual differences based on age and income. It also identifies two sub-populations, one best fit by a more classical model of risk preference, and the other by a behavioral model which incorporates loss aversion.

marketing research tools, consumer behavior, decision-making, parameter estimation, measurement, segmentation, risk, utility, uncertainty

Abstract:
Loss aversion, the fact that losses have a greater impact than gains, is a fundamental property of behavioral accounts of choice. In this paper, we suggest four possible characterizations of the relative impact of losses and gains: (1) It could be a constant, such as the much cited value of 2, as in losses have twice the impact of gains. (2) It could be a systematic individual difference, with some individuals more or less loss aversion, (3) it could be a property of the attribute, or (4) a property of the different processes used to construct selling and buying prices. We examine the behavior of a large sample of auto buyers using an experiment which allows us to measure loss aversion, at the individual level for several different attributes. A set of hierarchical linear models shows that to understand loss aversion, one must consider the process used to construct prices. Interestingly, we show that knowledge of the attribute lowers loss aversion and that age and attribute importance increases loss aversion.

loss aversion, consumer choice, reference-dependent preferences

Abstract:
Presents the findings from a panel data on consumer buying behavior on the Internet. Advantages and disadvantages of panel data for survey research; Demographics of online consumers; Dollar amount that consumers are spending online; Total online spending projections in the United States.

consumer behavior, electronic commerce, consumers' attitudes

Abstract:
Defaults have such powerful, pervasive and unrecognized effects on consumer behavior that in some settings they may be considered 'hidden persuaders'. Looking at defaults from the perspective of consumer welfare, consumer autonomy and marketing ethics, this paper shows that ignoring defaults is not an option. It identifies three theoretical causes of default effects-implied endorsement, cognitive biases, and effort-to guide thought on the appropriate marketer response to the issues posed for consumer autonomy and welfare. We propose the concepts of "smart defaults" and "adaptive defaults" as welfare-enhancing and market-oriented alternatives to the current practice of generally ignoring default effects, in addition to other remedies. Our analysis highlights how an ethical market orientation would consider the process of consumer decision making as well as its outcomes: marketers bear responsibility for consumer buying mistakes arising from the marketer's inept neglect or misuse of defaults. As well as recommendations for marketing practice, we also identify policymaker and research implications of defaults and consider, more broadly, the ethics of using techniques that influence consumer choice without consumer awareness.

Default Effects, Marketing Ethics, Consumer Choice, Consumer Welfare, Consumer Autonomy

Abstract:
Loss aversion can occur in riskless and risky choices. Yet, there is no evidence whether people who are loss averse in riskless choices are also loss averse in risky choices. We measure individual-level loss aversion in riskless choices in an endowment effect experiment by eliciting both WTA and WTP from each of our 360 subjects (randomly selected customers of a car manufacturer). All subjects also participate in a simple lottery choice task which arguably measures loss aversion in risky choices. We find substantial heterogeneity in both measures of loss aversion. Loss aversion in the riskless choice task and loss aversion in the risky choice task are highly significantly and strongly positively correlated. We find that in both choice tasks loss aversion increases in age, income, and wealth, and decreases in education.

loss aversion, endowment effect, field experiments

Abstract:
The article discusses how should policy-makers choose defaults regarding organ donors. First, consider that every policy must have a no-action default, and defaults impose physical, cognitive, and, in the case of donation, emotional costs on those who must change their status. Second, note that defaults can lead to two kinds of misclassification, willing donors who are not identified or people who become donors against their wishes. Changes in defaults could increase donations in the United States of additional thousands of donors a year. Because each donor can be used for about three transplants, the consequences are substantial in lives saved.

organ donors, donation of organs, donation of tissues, transplantation

Abstract:
An important pricing decision that many firms face is whether to use a partitioned price, which divides a product's price into two or more parts, or to charge one all-inclusive price. This paper examines trends in partitioned pricing in the marketplace and public policy arenas, and then proposes and uses a framework to organize and review extant academic research on partitioned pricing. It also proposes psychological explanations for why partitioned pricing affects consumers. We discuss the implications of academic research for practitioners and public policy makers when they create or regulate partitioned pricing strategies, and identify unanswered questions in partitioned pricing as a proposed agenda for continuing research.

partitioned pricing, fees, surcharges, taxes, shipping and handling

Abstract:
Marketers face a myriad of decisions when developing a Web site for e-commerce. In this article, we attempt to organize our current understanding of consumer behavior into streams of research that address the development of marketplaces for the digital economy. We start by characterizing computerbased decision environments as Marketplaces of the Artificial, arguing that the unbundling of product information from products presents many decisions and opportunities for the design of decision environments. We then review four areas of research, identifying themes in each area. These areas are (a) the economics of search; (b) cognitive cost approaches; (c) constructed preference approaches; and (d) phenomenological approaches. We illustrate each approach, highlighting its assumptions and discussing examples of research questions and results.

web site development, electronic commerce, consumer behavior, internet marketing, internet industry, marketing

Abstract:
How is risk-taking affected by prior gains and losses? While normative theory implores decision makers to only consider incremental outcomes, real decision makers are influenced by prior outcomes. We first consider how prior outcomes are combined with the potential payoffs offered by current choices. We propose an editing rule to describe how decision makers frame such problems. We also present data from real money experiments supporting a "house money effect" (increased risk seeking in the presence of a prior gain) and "break-even effects" (in the presence of prior losses, outcomes which offer a chance to break even are especially attractive).

decision making, prospect theory, sunk costs, mental accounting

Abstract:
Consumers worldwide can shop online 24 hours a day, seven days a week, 365 days a year. Some market sectors, including insurance, financial services, computer hardware and software, travel, books, music, video, flowers, and automobiles, are experiencing rapid growth in online sales. For example, in Jan. 1999, Dell Computer Corp. was selling an average of $14 million of equipment online per day, and Amazon.com has become the third largest bookseller in the U.S., despite being in business only since 1995. With projections that the Internet will generate consumer and business-to-business sales in excess of $294 billion by 2002, online retailing raises many questions about how to market on the Net.

Abstract:
A series of studies examines whether certain biases in probability assessments and perceptions of loss, previously found in experimental studies, affect consumers' decisions about insurance. Framing manipulations lead the consumers studied here to make hypothetical insurance-purchase choices that violate basic laws of probability and value. Subjects exhibit distortions in their perception of risk and framing effects in evaluating premiums and benefits. Illustrations from insurance markets suggest that the same effects occur when consumers make actual insurance purchases.

insurance decisions, biases, probability distortions, framing

Abstract:
We examine three possible explanations for differences in Internet privacy concerns revealed by national regulation: (1) These differences reflect and are related to differences in cultural values described by other research; (2) these differences reflect differences in Internet experience; or (3) they reflect differences in the desires of political institutions without reflecting underlying differences in privacy preferences. Using a sample of Internet users from 38 countries matched against the Internet population of the United States, we find support for (1) and (2), suggesting the need for localized privacy policies. Privacy concerns decline with Internet experience. Controlling for experience, cultural values were associated with differences in privacy concerns. These cultural differences are mediated by regulatory differences, although new cultural differences emerge when differences in regulation are harmonized. Differences in regulation reflect but also shape country differences. Consumers in countries with sectoral regulation have less desire for more privacy regulation.

information resources management, consumers research, privacy, consumers' prefrences, internet, consumer satisfaction

Abstract:
This article extends the idea that priming can influence preferences by making selected attributes focal. Our on-line experiments manipulate the background pictures and colors of a Web page, affecting consumer product choice. We demonstrate that these effects occur for both experts and novices, albeit by different mechanisms. For novices, priming drives differences in external search that, in turn, drive differences in choice. For experts, we observe differences in choice that are not mediated by changes in external search. These findings confirmed that on-line atmospherics in electronic environments could have a significant influence on consumer choice.

consumers' preferences, research, electronic commerce, web sites, consumers' attitudes, priming, color, pictures, choice, persuasion, design, masked priming, visual communication, industrial design coordination

Abstract:
Understanding how limited resources influence decision making is important to theory and even more to important practice. I focus on two questions inspired by Baumeister et al.: (1) What exactly is depleted? and (2) Is it useful to employ Systems 1 and 2 in modeling depletion? I discuss possible candidates for depletion at both the neural and the cognitive process levels and argue that a dual process model of depletion makes a very clear set of testable predictions. Finally, I believe that understanding the causes of depletion is essential in designing helpful choice environments.

Abstract:
When asked to delay consumption, people are impatient and discount future rewards more than when offered the chance to accelerate consumption. Three experiments provide a process-level account for this asymmetry, with implications for the design of decision environments that promote less impulsivity. In Experiment 1, a thought-listing procedure shows that people decompose discount valuation into two queries. Considering delayed vs. accelerated receipt of a gift-certificate influences the order in which memory is queried to support immediate vs. delayed consumption, which affects the number of patient vs. impatient thoughts. Relative frequency and clustering of impatient thoughts predicts discounting and mediates the discounting asymmetry. Experiment 2 implicates query-order causally: Listing reasons for immediate vs. delayed consumption in the orders people use spontaneously in acceleration and delay decisions replicates the discounting asymmetry; reversing this order eliminates it. Experiment 3 supports a memory-interference account of the effect of query order, using an implicit-memory task.

Abstract:
This paper examines search across competing e-commerce sites. By analyzing panel data from over 10,000 Internet households and three commodity-like products (books, compact discs (CDs), and air travel services), we show that the amount of online search is actually quite limited. On average, households visit only 1.2 book sites, 1.3 CD sites, and 1.8 travel sites during a typical active month in each category. Using probabilistic models, we characterize search behavior at the individual level in terms of (1) depth of search, (2)dynamics of search, and (3) activity of search. We model an individual's tendency to search as a logarithmic process, finding that shoppers search across very few sites in a given shopping month. We extend the logarithmic model of search to allow for time-varying dynamics that may cause the consumer to evolve and, perhaps, learn to search over time. We find that for two of the three product categories studied, search propensity does not change from month to month. However, in the third product category we find mild evidence of time-varying dynamics, where search decreases over time from already low levels. Finally, we model the level of a household's shopping activity and integrate it into our model of search. The results suggest that more-active online shoppers tend also to search across more sites. This consumer characteristic largely drives the dynamics of search that can easily be mistaken as increases from experience at the individual level.

Abstract:
The well-documented shortage of donated organs suggests that greater effort should be made to increase the number of individuals who decide to become potential donors. We examine the role of one factor: the no-action default for agreement. We first argue that such decisions are constructed in response to the question, and therefore influenced by the form of the question. We then describe research that shows that presumed consent increases agreement to be a donor, and compare countries with opt-in (explicit consent) and opt-out (presumed consent) defaults. Our analysis shows that opt-in countries have much higher rates of apparent agreement with donation, and a statistically significant higher rate of donations, even with appropriate statistical controls. We close by discussing the costs and benefits associated with both defaults as well as mandated choice.

Organ donation, Decision, Defaults, Policy

Abstract:
Defaults options have important applications within public policy programs concerning retirement savings, organ donation, and for consumer choice. Past research has theorized several potential reasons why no-action defaults have a profound effect on choice: (i) effort, (ii) implied endorsement, and (iii) reference dependence and its effect on preference construction. However, while the first two of these reasons have been experimentally demonstrated, the latter has not. In two experiments, we produce default effects and simultaneously measure the impact of these three factors. We examine choices between two environmentally consequential alternatives: a cheap but inefficient or an expensive but efficient, light bulb. The results demonstrate that reference dependence can play a leading role in mediating observed default effects. Specifically, we find that the queries formulated by the defaults produce differences in constructed preferences.

defaults, query theory, decision making, preference construction

Abstract:
Permission marketing requires consumers' consent before a Web site can track them with cookies, or send them marketing email, or sell their data to another company. Yet a study conducted by Cyber Dialogue Inc. found that 69% of U.S. Internet users did not know they had given their consent to be included on email distribution lists. Using the right combination of question framing and default answer, an online organization can almost guarantee it will get the consent of nearly every visitor to its site. Although lists of people who have supposedly opted-in for permission marketing schemes are valuable sources of revenue for Web sites, high response rates alone do not mean these lists contain valuable customers. They systematically explored the influence of question framing and response defaults on consumers' apparent privacy preferences in two online experiments detailed. Participants in these experiments were members of the Wharton Virtual Test Market, an online panel of over 30,000 Internet users representative of the U.S. Internet population. Results of experiments highlight the need for all online consumers to pay close attention to what they agree to when they send responses to a Web site. If consumers had fixed policies about the privacy of their data, then asking them to opt-out or opt-in to a Web site's privacy policy would make no difference to their answer.

consumer behavior, permission marketing, web sites, internet users, response rates, records management, filtering software

Abstract:
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.

privacy, consumer choice, framing, default effects, electronic commerce

Abstract:
In their article, Ho, Lim, and Camerer (2006) lead by example. They identify principles from behavioral economics, and rather than simply exhort their readers to pay attention, they actually produce impressive demonstrations of how these principles can be applied to substantive marketing problems. It is easy to argue that these ideas are important, but it is more difficult to demonstrate that importance. Implicitly, Ho, Lim, and Camerer send a message of encouragement: Behaviorally realistic assumptions are not problems to be ignored; they are opportunities. Formal models can capture psychologically realistic concerns. Together, they should be the grist for the next generation of marketing mills.

behavioral economicsbehavioral economics, citation analysis, decision making, marketing theory, quantitative models

Abstract:
We did experiments in a three-round bargaining game where the (perfect) equilibrium offer was $1.25 and an equal split was $2.50. The average offer was $2.11. Patterns of information search (measured with a computerized information display) show limited lookahead rather than backward induction. Equilibrium theories which adjust for social utilities (reflecting inequality-aversion or reciprocity) cannot explain the results because they predict subjects will make equilibrium offers to "robot" players, but offers to robots are only a little lower. When trained subjects (who quickly learned to do backward induction) bargained with untrained subjects, offers ended up halfway between equilibrium and $2.11.

bargaining, experimental economics, bounded rationality, behavioral economics, behavioral game theory, fairness, limited cognition

Abstract:
How do people judge the monetary value of objects? One clue is provided by the typical endowment study (D. Kahneman, J. L. Knetsch, & R. H. Thaler, 1991), in which participants are randomly given either a good, such as a coffee mug, that they may later sell ("sellers") or a choice between the good and amounts of cash ("choosers"). Sellers typically demand at least twice as much as choosers, inconsistent with economic theory. This result is usually explained by an increased weighting of losses, or loss aversion. The authors provide a memory-based account of endowment, suggesting that people construct values by posing a series of queries whose order differs for sellers and choosers. Because of output interference, these queries retrieve different aspects of the object and the medium of exchange, producing different valuations. The authors show that the content and structure of the recalled aspects differ for selling and choosing and that these aspects predict valuations. Merely altering the order in which queries are posed can eliminate the endowment effect, and changing the order of queries can produce endowment-like effects without ownership.

decision making, preference construction, loss aversion, endowment effect

Abstract:
The authors suggest that learning is an important factor in electronic environments and that efficiency resulting from learning can be modeled with the power law of practice. They show that most Web sites can be characterized by decreasing visit times and that generally those sites with the fastest learning curves show the highest rates of purchasing.

consumer behavior, research, web sites, electronic commerce, marketing research, purchasing, customer loyalty, learning, environmental aspects, cognitive science

Abstract:
This paper identifies when other-regarding preferences (ORPs) such as trust, reciprocity and altruism will likely arise. We experimentally examine the influence of social distance and communication on ORPs in four countries. We demonstrate that country of origin significantly influences ORPs, but also find mixed support for the relationship between ORPs and social distance; increasing social distance has the expected negative effect in the individually oriented U.S., but its effects internationally are different. This interaction is explained by an individual's cultural orientation. Finally, we show strong evidence that personal but irrelevant communication significantly increases ORPs.

Trust, Reciprocity, International, Communication, Social distance

Abstract:
In the last several years, the increased diffusion of computer and telecommunications technologies in businesses and homes has produced new ways for organizations to connect with their customers. These computer mediated environments (CMEs) such as the World Wide Web raise new research questions. In this paper, we examine the potential research issues associated with CMEs in five areas: (1) decision processes, (2) advertising and communications, (3) brand choice, (4) brand communities, and (5) pricing.

consumer choice, internet

Abstract:
The silver lining effect predicts that segregating a small gain from a larger loss results in greater psychological value than does integrating them into a smaller loss. Using a generic prospect theory value function, we formalize this effect and derive conditions under which it should occur. We show analytically that if the gain is smaller than a certain threshold, segregation is optimal. This threshold increases with the size of the loss and decreases with the degree of loss aversion of the decision maker. Our formal analysis results in a set of predictions suggesting that the silver lining effect is more likely to occur when: (i) the gain is smaller (for a given loss), (ii) the loss is larger (for a given gain), (iii) the decision maker is less loss averse. We test and confirm these predictions in two studies of preferences, both in a non-monetary and a monetary setting, analyzing the data in a hierarchical Bayesian framework.

Mental accounting, Prospect Theory, Loss Aversion

Abstract:
Investing for retirement is one of the most consequential yet daunting decisions consumers face. We present a way to both aid and understand consumers as they construct preferences for retirement income. The method enables consumers to build desired probability distributions of wealth constrained by market forces and the amount invested. We collect desired wealth distributions from a sample of working adults, provide evidence of the technique's reliability and predictive validity, characterize individual- and cluster-level differences, and estimate parameters of risk aversion and loss aversion. We discuss how such an interactive method might help people construct more informed preferences.

Abstract:
The authors examine how a constructive preferences perspective might change the prevailing view of medical decision making by suggesting that the methods used to measure preferences for medical treatments can change the preferences that are reported. The authors focus on 2 possible techniques that they believe would result in better outcomes. The 1st is the wise selection of default options. Defaults may be best applied when strong clinical evidence suggests a treatment option to be correct for most people but preserving patient choice is appropriate. The 2nd is the use of environments that explicitly facilitate the optimal construction of preferences. This seems most appropriate when choice depends on a patient's ability to understand and represent probabilities and outcomes. For each technique, the authors describe the background and literature, provide a case study, and discuss applications.

constructive preferences, decision analysis, decision environments, affective forecasting, defaults

Abstract:
Based upon a recently developed multiattribute generalization of prospect theory's value function (Tversky and Kahneman 1991), we argue that consumer choice is influenced by the position of brands relative to multiattribute reference points, and that consumers weigh losses from a reference point more than equivalent sized gains (loss aversion). We sketch implications of this model for understanding brand choice. We develop a multinomial logit formulation of a reference-dependent choice model, calibrating it using scanner data. In addition to providing better fit in both estimation and forecast periods than a standard multinomial logit model, the model's coefficients demonstrate significant loss aversion, as hypothesized. We also discuss the implications of a reference-dependent view of consumer choice for modeling brand choice, demonstrate that loss aversion can account for asymmetric responses to changes in product characteristics, and examine other implications for competitive strategy.

brand choice, buyer behavior, choice models, reference effects

Abstract:
Our memories define who we are and what we do. Aside from a few preferences hardwired by evolution, they also define what we like and how we choose. In this chapter, we argue that our view of preference changes if conceptualized explicitly as the product of memory representations and memory processes. We draw on insights about the functions and operations of memory provided by cognitive psychology and social cognition to show that memory plays a crucial role in preference and choice. We examine memory processes in preference and choice at a more "micro" and process-oriented level than previous investigations into the role of memory processes, but at a level that is cognitive and functional, rather than computational. We suggest that a consideration of properties of memory representation and retrieval may provide a unifying explanatory framework for some seemingly disparate preference phenomena.

Abstract:
Past research has established that, while self-reports of purchase intentions can predict behavior, various factors affect the strength of the intentions-behavior link. This article explores one such factor: the impact of merely measuring intent. Our specific question concerns the impact of measuring intent on subsequent purchase behavior. Prior research suggests a mere-measurement hypothesis: that merely measuring intent will increase subsequent purchase behavior. We also suggest a polarization hypothesis: that repeated intent questions will have a polarizing effect on behavior. The results reveal that the effect of merely asking intent to buy once is an increase in the subsequent purchase rate. The effect of repeatedly asking intent for those with low levels of intent is a decreased propensity to buy with repeated measurements. These two effects are reduced given prior experience with the product. The implications of these findings and opportunities for future research are discussed.

Abstract:
Many firms divide a product's price into two mandatory parts, such as the base price of a mail-order shirt and the surcharge for shipping and handling, rather than charging a combined, all-inclusive price. The authors call this strategy partitioned pricing. Although firms presumably use partitioned pricing to increase demand and profits, there is little clear empirical support that these prices increase demand or any theoretical explanation for why this should occur. The authors test hypotheses of how consumers process partitioned prices and how partitioned pricing affects consumers' processing and recall of total costs and their purchase intentions and certain types of demands. The results suggest that partitioned prices decrease consumers' recalled total costs and increase their demands. The manner in which the surcharge is presented and consumers' affect for the brand name also influence how they react to partitioned prices.

Abstract:
How will the widespread diffusion of information technology change consumer research? I argue that information technology will profoundly change the way knowledge is generated and disseminated. In generating knowledge, consumer researchers will see the diminishing use of student subjects, an increase in the use of global samples, panels, secondary data, and information acquisition techniques. In disseminating knowledge, I suggest the possibility of self-organizing journals that would use the ratings of selected readers to determine the status of submitted research.

information technology, diffusion of innovations, consumers' research, consuemrs' attitudes, consumer behavior, sampling, cost effectiveness, globalization, information resources, technological innovations, methodology, information sharing

Abstract:
Resolution of debates in cognition usually comes from the introduction of constraints in the form of new data about either the process or representation. Decision research, in contrast, has relied predominantly on testing models by examining their fit to choices. The authors examine a recently proposed choice strategy, the priority heuristic, which provides a novel account of how people make risky choices. The authors identify a number of properties that the priority heuristic should have as a process model and illustrate how they may be tested. The results, along with prior research, suggest that although the priority heuristic captures some variability in the attention paid to outcomes, it fails to account for major characteristics of the data, particularly the frequent transitions between outcomes and their probabilities. The article concludes with a discussion of the properties that should be captured by process models of risky choice and the role of process data in theory development.

risky choice, decision making, cognitive processes, process tracing

Abstract:
A viewpoint that has recently emerged in decision research is that preferences for objects of any complexity are often constructed - not merely revealed - in generating a response to a judgment or choice task. This paper reviews a program of research that traces the constructiveness of preferences to the use of multiple strategies in decision making, contingent on task demands. It is argued that individuals often build strategies opportunistically, changing their processing on the spot depending upon the information they encounter during the course of solving the decision problem

Abstract:
Somehow, consumer research has forgotten about risk. Much research has focused on frequently purchased packaged goods, and so it might be understandable that the concept of risk has lingered in the shadows. Although risk is involved in the purchase of packaged goods, it is minor compared with that in other domains of much greater economic consequence. This special issue will not remedy this neglect, but I want to introduce briefly some of the relevant literature in the hopes that some people will be inspired by the fine set of articles contained herein and that a few guideposts will be helpful starting points. I provide a brief sketch, focusing on pointers to more complete introductions, and draw illustrations from the domain of insurance decisions.

Abstract:
We explored the effect of attribute framing on choice, labeling charges for environmental costs as either an earmarked tax or an offset. 898 Americans chose between otherwise identical products or services, where one option included a surcharge for emitted CO2. The cost framing changed preferences for self-identified Republicans and Independents, but did not affect Democrats' preferences. We explain this interaction using Query Theory and show that attribute framing can change the order in which internal queries supporting one or the other choice option are posed. The effect of attribute labeling on query order is shown to depend on the representations of either taxes or offsets held by people with different political affiliations.

attribute framing, constructive preference, consumer choice, memory representation, political affiliation, Query Theory

Abstract:
Process tracing methods, particularly those based on information acquisition, are becoming commonplace. Because of this, it is important to examine both the reactivity and the validity of these techniques. This research compares information acquisition behavior for choice tasks using Mouselab, a computerized process tracing tool, and Eyegaze, an eye tracking system. In an experiment using apartment selection tasks and gambles, we found significant differences contingent upon the process tracing method for 10 process tracing measures including subsequent choices. Computerized process tracing tools increase the amount of time needed to acquire information compared with eye tracking equipment. As a result, subjects using Mouselab tend to have more systematic information acquisition behavior than that observed with eye tracking equipment. Additional research is needed to explore the magnitude and consequences of these differences.

Abstract:
The advent of electronic environments is bound to have profound effects on consumer decision making. While the exact nature of these influences is only partially known it is clear that consumers could benefit from properly designed electronic agents that know individual users' preferences and can act on their behalf. An examination of the various roles agents perform is presented as a framework for thinking about the design of electronic agents. In addition, a set of goals is established that include both outcome-based measures, such as improving decision quality, as well as process measures like increasing satisfaction and developing trust.

agents, e-commerce, consumer choice

Abstract:
Although multi-attribute choice and judgment models have been used to support the product design decisions of firms in a wide variety of industries, their application nevertheless comes with a couple of important caveats. First, some argue that most modeling approaches are limited in their ability to provide detailed insights into how consumers are actually processing product attribute information when making choices. Second, current methods do little to mitigate the natural hesitation by most managers to make high-stakes decisions on the basis of a single data source. One methodology -- process-assisted choice modeling -- addresses both these concerns. A case study of how PACMod might be applied is presented.

Abstract:
We appreciate that Brandstatter, Gigerenzer, and Hertwig (2008) agree that process models are indeed useful for advancing researchers' understanding of choice processes. Their statement that choices represent adaptive process is also welcome (see Payne, Bettman, & Johnson, 1993), as is the emphasis on multiple measures. However, we do disagree on two empirical matters.

Abstract:
Anchoring is a pervasive judgment bias in which decision makers are systematically influenced by random or 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, little is known about the underlying causes of anchoring. 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 develop this Confirmatory Search mechanism of anchoring and contrast it with two alternative mechanisms: Averaging and Dynamic Adjustment. To isolate the causes of anchoring, we present six experiments that examine the effects of several experimental manipulations on judgments of value and belief as well as several measures of cognitive processes. Four facts about the anchoring bias were established. First, prompting subjects to consider features of the item that were different from the anchor reduced anchoring, while increasing consideration of similar features had no effect. Second, subjects’ judgments were a linear function of anchor value. Third, items of uncertain value demonstrated a larger anchoring bias than did items of more certain value. Finally , anchoring was unaffected by financial incentives and perceived informativeness of the anchor. We close by showing that a Confirmatory Search approach both provides a mechanism for debiasing anchoring, and unites anchoring with a number of other judgment phenomena.

Abstract:
In this research, we examine the influence of beliefs about fairness on bargaining behavior. Using a repeated ultimatum game, we examine bargaining contexts in Japan and the United States in which buyers' or sellers' fair beliefs are either in alignment with or in conflict with their own self-interest. We suggest that understanding the relationship between fair beliefs and self-interest is central to understanding when fair beliefs will influence bargaining behavior. Our results demonstrate that fair beliefs predict bargaining behavior when they are aligned with one's own self-interest.

marketing research, consumer behavior, game theory, conflict management, supply & demand, negotiation, fairness, self-interest

Abstract:
A full range of psychological processes has been put into play to explain judgment and choice phenomena. Complementing work on attention, information integration, and learning, decision research over the past 10 years has also examined the effects of goals, mental representation, and memory processes. In addition to deliberative processes, automatic processes have gotten closer attention, and the emotions revolution has put affective processes on a footing equal to cognitive ones. Psychological process models provide natural predictions about individual differences and lifespan changes and integrate across judgment and decision making ( JDM) phenomena. Mindful" JDM research leverages our knowledge about psychological processes into causal explanations for important judgment and choice regularities, emphasizing the adaptive use of an abundance of processing alternatives. Such explanations supplement and support existing mathematical descriptions of phenomena such as loss aversion or hyperbolic discounting. Unlike such descriptions, they also provide entry points for interventions designed to help people overcome judgments or choices considered undesirable.