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1 – 10 of over 46000The author presents new estimates of the probability weighting functions found in rank-dependent theories of choice under risk. These estimates are unusual in two senses. First…
Abstract
The author presents new estimates of the probability weighting functions found in rank-dependent theories of choice under risk. These estimates are unusual in two senses. First, they are free of functional form assumptions about both utility and weighting functions, and they are entirely based on binary discrete choices and not on matching or valuation tasks, though they depend on assumptions concerning the nature of probabilistic choice under risk. Second, estimated weighting functions contradict widely held priors of an inverse-s shape with fixed point well in the interior of the (0,1) interval: Instead the author usually finds populations dominated by “optimists” who uniformly overweight best outcomes in risky options. The choice pairs used here mostly do not provoke similarity-based simplifications. In a third experiment, the author shows that the presence of choice pairs that provoke similarity-based computational shortcuts does indeed flatten estimated probability weighting functions.
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Carola Grebitus and Jutta Roosen
The purpose of this research is to test how varying the numbers of attributes and alternatives affects the use of heuristics and selective information processing in discrete choice…
Abstract
Purpose
The purpose of this research is to test how varying the numbers of attributes and alternatives affects the use of heuristics and selective information processing in discrete choice experiments (DCEs). The effects of visual attribute and alternative non-attendance (NA) on respondent choices are analyzed.
Design/methodology/approach
Two laboratory experiments that combined eye tracking and DCEs were conducted with 109 and 117 participants in the USA. The DCEs varied in task complexity by the number of product attributes and alternatives.
Findings
Results suggest that participants ignore both single attributes and entire alternatives. Increasing the number of alternatives significantly increased attribute NA. Including NA in choice modeling influenced results more in more complex DCEs.
Research limitations/implications
The current experiments did not test for choice overload. Future studies could investigate more complex designs. The choice environment affects decision-making. Future research could compare laboratory and field experiments.
Practical implications
Private and public sectors often use DCEs to determine consumer preference. Results suggest that DCEs with two alternatives are superior to DCEs with four alternatives because NA was lower in the two-alternative design.
Originality/value
This empirical research examined effects of attribute and alternative NA on choice modeling using eye tracking and DCEs with varying degrees of task complexity. Results suggest that accounting for NA reduces the risk of over- or understating the impact of attributes on choice, in that one avoids claiming significance for attributes that might not truly be preferred, and vice versa.
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This paper reviews the current literature on theoretical and methodological issues in discrete choice experiments, which have been widely used in non-market value analysis, such…
Abstract
Purpose
This paper reviews the current literature on theoretical and methodological issues in discrete choice experiments, which have been widely used in non-market value analysis, such as elicitation of residents' attitudes toward recreation or biodiversity conservation of forests.
Design/methodology/approach
We review the literature, and attribute the possible biases in choice experiments to theoretical and empirical aspects. Particularly, we introduce regret minimization as an alternative to random utility theory and sheds light on incentive compatibility, status quo, attributes non-attendance, cognitive load, experimental design, survey methods, estimation strategies and other issues.
Findings
The practitioners should pay attention to many issues when carrying out choice experiments in order to avoid possible biases. Many alternatives in theoretical foundations, experimental designs, estimation strategies and even explanations should be taken into account in practice in order to obtain robust results.
Originality/value
The paper summarizes the recent developments in methodological and empirical issues of choice experiments and points out the pitfalls and future directions both theoretically and empirically.
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Linhai Wu, Hongsha Wang and Dian Zhu
The purpose of this paper is to reveal the actual consumer demand for traceable pork by investigating consumer preferences for pork with combined levels of traceability…
Abstract
Purpose
The purpose of this paper is to reveal the actual consumer demand for traceable pork by investigating consumer preferences for pork with combined levels of traceability information based on differences in individual consumer preferences, in order to support the government in decision making regarding the gradual construction of safe food markets.
Design/methodology/approach
Combinations of four types of traceability information, including farming, slaughter and processing, distribution and sales, and government certification, with price were randomly designed. To identify consumer preferences for these attribute combinations of traceable pork, 215 consumers in Wuxi, Jiangsu Province were investigated using a real choice experiment and the mixed logit model.
Findings
Significant heterogeneity was observed in consumer preferences for traceable pork. The information of farming, slaughter and processing, distribution and marketing, and government certification could significantly improve consumer utility. Moreover, consumers had the highest preference for government certification information.
Originality/value
Although numerous studies have been performed on consumer preferences for food safety attributes using a real choice experiment, almost none of them focus on Chinese consumers. Therefore, this study is an attempt to fill this gap. The conclusions of this study can serve as a reference for the Chinese government in developing safe food consumption policies. Although Chinese consumers have cried out for improvement of pork safety, they have different preferences for traceability information; thus, the government must promote traceable food step-by-step, using consumer preferences as a starting point.
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Tommy Gärling, Dawei Fang, Martin Holmen and Patrik Michaelsen
The purpose of this paper is to investigate how social comparison and motivation to compete account for elevated risk-taking in fund management corroborated by asset market…
Abstract
Purpose
The purpose of this paper is to investigate how social comparison and motivation to compete account for elevated risk-taking in fund management corroborated by asset market experiments when performance depends on rank-based incentives.
Design/methodology/approach
In two laboratory experiments, university students (n1 = 240/n2 = 120) make choices between risky and certain outcomes of hypothetical sums of money. Both experiments investigate in which direction risky choices in an individual condition (individual risk preference) are shifted when participants compare their performance to another participant's performance (social comparison), being instructed or not to outperform the other (incentive to compete).
Findings
In the absence of incentives to compete, participants tend to minimize the differences between expected outcomes to themselves and to the other, but when provided with incentives to compete, they tend to maximize these differences. An independent additional increase in risk-taking is observed when participants are provided with incentives to compete.
Originality/value
Original findings include that social comparison does not evoke motivation to compete unless incentives are offered and that increases in risk-taking depend both on what the other chooses and the incentives.
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Alexander Schjøll and Frode Alfnes
The purpose of this paper is to illustrate and discuss methodology issues in menu-labelling experiments in commercial full-service restaurants, and to investigate how the menu…
Abstract
Purpose
The purpose of this paper is to illustrate and discuss methodology issues in menu-labelling experiments in commercial full-service restaurants, and to investigate how the menu description and price affects customers’ choice of an organic veal entrée in a Norwegian restaurant.
Design/methodology/approach
A menu-labelling experiment was conducted in a fine-dining restaurant during ordinary opening hours over a period of two weeks. The menu description of an organic veal entrée was altered repeatedly and the effect of these changes on the sales of this entrée was investigated.
Findings
Adding words to the menu description, such as “organic”, or describing animal welfare had a very limited effect on customers’ choices in the restaurant.
Research limitations/implications
The research illustrates the use of a natural field experiment in a commercial full-service restaurant and discusses strengths and weaknesses of the methodology.
Originality/value
Few experiments have been performed on the effect on credence attributes in commercial full-service restaurants and there is little knowledge about research challenges in menu-labelling experiments. This paper contributes to the knowledge on both issues by conducting a natural field experiment in a fine-dining restaurant.
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Achilleas Vassilopoulos, Lydia Papadaki and Phoebe Koundouri
Storytelling through virtual reality (VR) combines the strengths of cutting-edge technology with traditional informational campaigns. As a tool for climate change mitigation, VR…
Abstract
Purpose
Storytelling through virtual reality (VR) combines the strengths of cutting-edge technology with traditional informational campaigns. As a tool for climate change mitigation, VR has been shown to educate individuals and stimulate both emotional and cognitive responses that promote pro-environmental behavior. This paper aims to investigate whether these benefits extend to the field of green investing through an experiment conducted with a sample of small business entrepreneurs.
Design/methodology/approach
The experimental design involved making choices between bonds varying in maturity dates, annual interest and environmental classification (regular versus green). To identify potential impacts of the immersive experience on investment decisions, these choices were made both before and after exposure to VR videos illustrating the devastating effects of climate change. A multiple price list was employed to elicit subjects' risk preferences, enabling the joint estimation of the treatment effect and the risk and time preference parameters.
Findings
The findings indicate that, when risk and time preference parameters are controlled for, a VR experience can nudge toward green investment choices. This effect is more profound among those who already exhibit a greater propensity to opt for green investments.
Originality/value
Previous research shows that negative emotions, such as guilt, affect pro-environmental intentions, as well as actions, while message vividness through immersive experiences is effective in nudging greener behavior. Since analogous results in the framework of financial investments are not currently available, this paper seeks to test whether VR videos depicting the adverse effects of climate change can generate negative emotions associated with experiencing these effects and make them salient in subsequent investment decisions made by small business entrepreneurs.
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Toritseju Begho and Shuainan Liu
People often look to the opinions and actions of others to guide their food choices, especially when they are uncertain or unfamiliar with a particular food. This influence can be…
Abstract
Purpose
People often look to the opinions and actions of others to guide their food choices, especially when they are uncertain or unfamiliar with a particular food. This influence can be positive or negative depending on the context and can have an impact on food consumption and health outcomes.
Design/methodology/approach
The paper analysed data from 500 young adult consumers in China and employed a multi-study design to examine various aspects of social proof and herd behaviour in food choices. Experiment 1 examined the influence of testimonials from an influential person on buying decisions and eating behaviour. Experiment 2 explored whether herd behaviour drives food options. Experiment 3 assessed the influence of social proof on food choices. Chi-square tests of independence were conducted to examine the relationship between social proof and food choice, as well as herd behaviour and food decision-making. Several logit regression analyses were performed to identify the factors that drive consumers' susceptibility to social proof and herding.
Findings
The results indicated that the source of feedback, whether from an influential person or a family member, did not have a statistically significant effect on the likelihood of following the food guide recommendations. The preference for a healthier food option was stronger than following the herd. In contrast, social proof in the form of reviews and ratings influenced participants' choices. The paper highlights the usefulness for stakeholders and policymakers seeking to promote healthier eating habits.
Originality/value
The originality lies in its comprehensive approach, combining multiple experiments and analytical methods.
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Nguyen Quoc Viet, Sander de Leeuw and Erica van Herpen
This paper investigates the impact of sustainability information disclosure on consumers' choice of order-to-delivery lead-time in relation to consumers' sustainability concern.
Abstract
Purpose
This paper investigates the impact of sustainability information disclosure on consumers' choice of order-to-delivery lead-time in relation to consumers' sustainability concern.
Design/methodology/approach
Based on two choice experiments with participants from the Netherlands (n = 348) and the United Kingdom (n = 1,387), the impact of sustainability information disclosure was examined in connection with consumers' concerns for environmental and social sustainability. Information on environmental impact (carbon emission) and social impact (warehouse workers and drivers' well-being) was considered and compared.
Findings
Disclosing sustainability impact information significantly increased consumers' preference and choice for longer delivery times, with equivalent effects for environmental and social impact information. Consumers' relevant (environmental or social) sustainability concern as personality traits enhanced effects on preferences, as did priming of environmental concern.
Research limitations/implications
Future research may consider differences between product categories or e-commerce companies' reputation in sustainability activities.
Practical implications
The findings provide opportunities for online retailers to influence consumer choice of delivery time, especially through disclosing environmental and/or social sustainability information.
Originality/value
This study fills a gap in the literature on sustainability information disclosure to actively steer consumer choice of delivery time, particularly regarding the effect of social sustainability impact information in comparison to its environmental counterpart.
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