Context effect in consumer decision making: Role of choice characteristic and individual factors

Abstract

The decision-making science studies how environmental factors, decision option characteristics, and individual characteristics influence and determine the process of decision making and the decision being made. It has widely accepted the fact that there is still a need to know a lot more about the process and result of decision making. The decision making process includes many factors starting from the decision maker characteristics (personality, cognitive style, biases and attitudes), situational characteristics (time, pressure, insufficient information, stakes, risks and competition), decision options (tangible/intangible, value, demand, features and availability/affordability) to the interaction of all of these. With the rapid growth of technological development in the field of internet services, a revolution took place in the uprising of the consumer. It is influencing everyone with the help of mobile commerce, e-commerce, and social media site. This revolution has led to a significant shift from the offline market to the online market. As a result, the shopping decision is now a matter of clicking on a hyperlink or viewing a virtual image. This shift toward e-commerce website and mobile app has opened many opportunities for the market but at the same time raised many questions related to processes and factors influencing these processes in operation. Virtual reality shares certain qualities with physical reality (uncertainty, ambiguity, availability, and the possibility of variations in options and information to suit individual demands) and even exemplify theses. Marc Resnick (2001) suggested that the online environment could be an excellent platform to explore naturalistic decision making (NDM) processes (i.e., Area of study which explores the decision making in real life scenario). In light of the above background and the assumptions, the present study takes a consumer-centric and information processing approach and aims “to examine the role of option (choice) characteristics, individual characteristics and their interaction in online decision making.” Keeping in mind the methodological modification suggestion (Pilli, 2016) the study is conducted with the help of two naturalistic experiments and questionnaires. The sample was recruited with maximum variation method to capture the individual difference in decision making. Total of 600 individuals participated in the study covering different demographic categories, and finally, complete data was obtained from 424 participants. Results indicate that people may have become more adept at handling information, and therefore, people require more information (in comparison to previous decades) for decision making or experiencing information overload. Also, it is observed that low information is making people choose from extreme option and high information leading to choose middle options (compromise effect). the present study supports the previous literature that 1) alignability leads to compromise and non-alignability leads to an extreme decision; 2) the younger cohort is more impulsive; people are becoming more adaptive to process a large amount of information and information up to 12*12 (12 options with 12 attributes) is not creating information overload; 3) low amount of information makes people chose from extreme option, but when sufficient information is available people make compromise decision; and 4) the situations where individuals need to justify their decision, they prefer to make a decision instead of deferring from the decision. Present findings also pose questions to some of the established conclusions in literature, 1) cognitive-personality factors, age, or gender does not explain decision behavior in isolation; the effect is seen only when the interaction is examined; 2) deferral decision is much more complicated than explaining it only with the factors like availability of information, preference certainty, etc.; and 3) different generation may have entirely different decision behavior in addition to other individual-level factors. This study has filled in the gaps in previous literature for alignability effect, information load and extreme decision, information load, and deferral decision. The study has also provided new insights into realistic situations and has implication for marketers, product designers, and policymakers, etc.