Consumption and the Dynamics of Consumer Choice

Abstract

This dissertation includes three essays that investigate how aspects of the choice process influence consumption, attitudes and motivation. The first essay explores how the stage of consumption of the chosen alternative influences the attractiveness of a forgone alternative. Dozens of studies over the past fifty years have consistently shown that after making a choice between two attractive alternatives the forgone alternative decreases in attractiveness. However previous research has only compared the value of the forgone alternative before and after making a choice. This essay demonstrates that this devaluation effect only lasts until the chosen alternative has been consumed, at which point it rebounds in attractiveness. We show that this devaluation provides a way to avoid distraction while pursing the chosen alternative, supporting recent views on cognitive dissonance theory. The second essay demonstrates the importance of measuring the dual processes by which consumers make consumption decisions. Although most firms measure customer satisfaction, this metric only reflects an explicit decision-making process. The implicit process can be captured by measuring the impulsiveness with which consumers make decisions. Impulsiveness metrics are just as strongly related to firm value and customer behavior as satisfaction metrics, and in combination they provide a more comprehensive prediction. The third essay explores substitution effectiveness. Consumers often consume replacement products as substitutes for an unattained product. This research investigates how the similarity between the products influences how effectively products substitute for each other. Consumers tend to believe that replacement products become more effective substitutes for an unattained product as they increase in similarity. However in contrast to this belief, this research shows that moderately similar replacements are more effective than highly similar products at satisfying the desire for the unattained product. This relationship reverses at low levels of similarity where moderate similarity replacements are more effective substitutes than low similarity replacements.