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How Seemingly Irrelevant No-Choice Options Affect Consumer Decision Processes

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How Seemingly Irrelevant No-Choice Options Affect Consumer Decision Processes Jeffrey r. Parker and rom y. Schrift * to date, research on no-choice options has primarily examined the conditions that foster choice deferral, thus focusing on the frequency with which consumers select the no-choice option. in this article, the authors argue that even if the no-choice option is not selected, its mere presence in the choice set may alter consumers’ choices. more specifically, they investigate how decision processes and preferences change when consumers have a no-choice option versus when they are forced to choose from a given choice set. they propose that the inclusion of a no- choice option in a choice set affects preferences by leading consumers to determine not only which alternative is best, but which, if any, are acceptable (i.e., meet the consumer’s minimum needs). accordingly, the authors demonstrate that the inclusion of a no-choice option in the choice set (1) leads to more alternative- (rather than attribute-) based information processing, (2) increases the importance of attributes that are more meaningful when alternatives are evaluated one by one (i.e., enriched attributes), and (3) increases the importance of attributes with levels that are closer to the consumer’s minimum needs (thresholds). they demonstrate that such changes influence consumers’ preference structures and ultimate choices. they conclude with a discussion of the theoretical, methodological, and managerial implications of these findings. Keywords : no-choice options, decision criteria, rejectable choice sets, information processing, conjoint analysis rejectable choice Sets: how Seemingly irrelevant No-choice options affect consumer Decision Processes It is increasingly the norm for stated choice experiments we focus on the flip side of the coin: the decision processes to include a “no-choice” option that gives participants an and choices of consumers who do not opt for the no-choice out when they do not like any of the alternatives in the given option—that is, those who ultimately select one of the avail - choice set. To date, most of the literature on no-choice able alternatives. Could it be that the mere opportunity to options has focused on the numerous factors that lead to reject all of the available alternatives changes consumers’ choice deferral and which alternatives are more likely to decision processes and choices? If so, why and in what way? lose choice shares to the no-choice option. In this research, From a rational point of view, adding a no-choice option to the choice set should change neither the preference struc - tures nor the ultimate choices of consumers who do not opt *Jeffrey R. Parker is a doctoral candidate, Columbia University Busi - ness School (e-mail: [email protected]). Rom Y. Schrift is for the no-choice option. However, in this research, we Assistant Professor of Marketing, the Wharton School, University of Penn - argue and demonstrate that the mere addition of a no-choice sylvania (e-mail: [email protected]). The authors contributed option to the set changes consumers’ judgment criteria. In equally to this research, and order of authorship was determined by a coin toss. The authors thank Don Lehmann and Oded Netzer for their help and particular, it shifts the consumer’s focus away from compar - continuous support of this research. They also thank Jacob Goldenberg, ing the alternatives with one another to determine which is Ran Kivetz, Jonathan Levav, Leonard Lee, Page Moreau, and Olivier best (a comparative judgment) to evaluating the alternatives Toubia for their helpful comments and insights. Robert Meyer served as one by one to determine which, if any, meets the consumer’s associate editor for this article. needs (an evaluative judgment). This change in judgment © 2011, American Marketing Association Journal of Marketing Research ISSN: 0022-2437 (print), 1547-7193 (electronic) 840 Vol. XLVIII (October 2011), 840 –854 rejectable choice Sets 841 criteria is found to systematically affect consumers’ prefer - Researchers and practitioners alike have long recognized ence structures and ultimate choices. the importance of studying and addressing the no-choice After reviewing the relevant literature and developing our option. Indeed, it is now a common practice to include a no- theoretical framework, we present six empirical studies, choice option in choice experiments (e.g., choice-based which are divided into two main sections. In the first section, conjoint studies). Adding such a base alternative to the we demonstrate the shift in judgment criteria by showing that design offers several advantages, such as estimating the mere addition of a seemingly irrelevant no-choice option absolute demand and eliminating statistical biases (e.g., (1) results in consumers processing information in a more Haaijer, Kamakura, and Wedel 2001). Previous research has alternative- (vs. attribute-) based manner (Study 1), (2) leads also examined behavioral and psychological responses to consumers to store and recall information from memory in no-choice options, including (1) factors that lead to choice a more alternative- (vs. attribute-) based manner (Study 2), deferral (e.g., Dhar 1997; Greenleaf and Lehmann 1995; and (3) makes concepts associated with an evaluative judg - Gunasti and Ross 2009; Luce 1998; Tversky and Shafir ment more accessible in consumers’ minds (Study 3). 1992), (2) what types of alternatives are more likely to lose In the second section, we demonstrate how this shift in choice shares to the no-choice options (Dhar and Simonson judgment criteria influences consumers’ preferences and 2003), and (3) how different response modes interact with ultimate choices. Specifically, we show that adding a no- choice-set characteristics to influence purchase deferral choice option to the set increases the weight consumers (Dhar and Nowlis 2004). While the extant literature has attach to enriched (rather than comparable) attributes (Study largely focused its attention on the determinants for (and 4). Next, we demonstrate that the relative distance between consequences of) choice deferral, as well as the statistical the choice set and consumers’ minimum needs (thresholds) implications of incorporating no-choice options in choice becomes relevant and influences preferences when a no- experiments, we focus on the impact of no-choice options choice option is included in the choice set (Study 5). on consumers who do not opt for the no-choice option. That Taken together, the results of Studies 1–5 raise an impor - is, we investigate whether, why, and how the mere inclusion tant methodological question. Specifically, will the inclu - of a no-choice option affects consumers’ preferences for the sion or exclusion of a no-choice option in choice experi - originally available alternatives. ments systematically shift consumers’ preferences and, The presence or absence of a no-choice option in the consequently, the recovered parameters? Recent findings choice set should not rationally affect the preferences of consumers who do not choose the no-choice option. That is, (Gilbride and Allenby 2006) suggest that parameter esti - if the no-choice option does not provide any utility to the mates can indeed be affected by the inclusion or exclusion consumer, this undesired no-choice option should not affect of a no-choice option. Accordingly, in Study 6, we collabo - that consumer’s relative preference for the other available rate with a food company to directly examine this question alternatives. However, in this research, we challenge this using a choice-based conjoint analysis. The results confirm assumption and show that the inclusion or exclusion of a that the presence or absence of a no-choice option in the seemingly irrelevant no-choice option will shift consumers’ design systematically shifts consumers’ preferences in a preferences and choice. direction consistent with our predictions. We conclude by The notion that the addition of a seemingly irrelevant discussing the theoretical, methodological, and managerial alternative to the set may affect preferences and choice implications of our findings. shares is not novel in itself. For example, Huber, Payne, and REJECTABLE CHOICE SETS Puto (1982) demonstrate that the addition of asymmetrically dominated alternative (decoy) changes the choice shares of As consumers, we are faced with numerous decisions the originally available alternatives, a violation of regular - every day. In some situations, we are forced to choose one ity. Similarly, we argue that the inclusion or exclusion of a of the alternatives from the immediately available choice set seemingly irrelevant no-choice option may change con - (hereafter, we refer to this as choosing from a forced choice sumers’ preferences and ultimate choices by shifting their set). For example, the choice of necessities such as food, focus and judgment criteria. shelter, and medical care often cannot be deferred or avoided, at least not without incurring severe consequences. EVALUATIVE VERSUS COMPARATIVE JUDGMENTS Similarly, external restrictions such as laws requiring auto Imagine a consumer facing a choice between Alternatives insurance force a choice, as can product failures, expiration A and B, and assume that for this consumer, a no-choice dates, and dwindling supplies. In other situations, the possi - option (should it be offered) is undesirable (i.e., both A and bility of choosing none of the available alternatives in the B are acceptable). Given a forced choice set, this consumer choice set (i.e., take the no-choice option; hereafter, choos - is confronted only with the task of choosing the best avail - ing from a rejectable choice set) is a more viable option. It able option (i.e., picking the winner). Accordingly, we argue is important to note that even within the same product cate - that choosing from a forced choice set will trigger a more gory, consumers may choose from a forced choice set at cer - comparative judgment process in which the consumer tain times and from a rejectable choice set at other times. directly compares the alternatives and is focused on picking For example, a consumer must buy toilet paper when the the winner.
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