scholarly journals Choice Set Size and Decision Making: The Case of Medicare Part D Prescription Drug Plans

2010 ◽  
Vol 30 (5) ◽  
pp. 582-593 ◽  
Author(s):  
M. Kate Bundorf ◽  
Helena Szrek
Keyword(s):  
Decision Making ◽  
Prescription Drug ◽  
Consumer Decision Making ◽  
Medicare Beneficiaries ◽  
Policy Objective ◽  
Set Size ◽  
Prescription Drug Plans ◽  
Ordered Probit Models ◽  
The Impact ◽  
Choice Set

Background. The impact of choice on consumer decision making is controversial in US health policy. Objective. The authors’ objective was to determine how choice set size influences decision making among Medicare beneficiaries choosing prescription drug plans. Methods. The authors randomly assigned members of an Internet-enabled panel age 65 and older to sets of prescription drug plans of varying sizes (2, 5, 10, and 16) and asked them to choose a plan. Respondents answered questions about the plan they chose, the choice set, and the decision process. The authors used ordered probit models to estimate the effect of choice set size on the study outcomes. Results. Both the benefits of choice, measured by whether the chosen plan is close to the ideal plan, and the costs, measured by whether the respondent found decision making difficult, increased with choice set size. Choice set size was not associated with the probability of enrolling in any plan. Conclusions. Medicare beneficiaries face a tension between not wanting to choose from too many options and feeling happier with an outcome when they have more alternatives. Interventions that reduce cognitive costs when choice sets are large may make this program more attractive to beneficiaries.

scholarly journals Online Reviews and Product Sales: The Role of Review Visibility

2021 ◽  
Vol 16 (4) ◽  
pp. 638-669
Author(s):  
Miriam Alzate ◽  
Marta Arce-Urriza ◽  
Javier Cebollada
Keyword(s):  
Decision Making ◽  
Dynamic Models ◽  
Generalized Method Of Moments ◽  
Online Reviews ◽  
Consumer Decision Making ◽  
Product Sales ◽  
The Impact ◽  
The Relationship ◽  
The Empirical Analysis

When studying the impact of online reviews on product sales, previous scholars have usually assumed that every review for a product has the same probability of being viewed by consumers. However, decision-making and information processing theories underline that the accessibility of information plays a role in consumer decision-making. We incorporate the notion of review visibility to study the relationship between online reviews and product sales, which is proxied by sales rank information, studying three different cases: (1) when every online review is assumed to have the same probability of being viewed; (2) when we assume that consumers sort online reviews by the most helpful mechanism; and (3) when we assume that consumers sort online reviews by the most recent mechanism. Review non-textual and textual variables are analyzed. The empirical analysis is conducted using a panel of 119 cosmetic products over a period of nine weeks. Using the system generalized method of moments (system GMM) method for dynamic models of panel data, our findings reveal that review variables influence product sales, but the magnitude, and even the direction of the effect, vary amongst visibility cases. Overall, the characteristics of the most helpful reviews have a higher impact on sales.

The influence of price and promotion on package size propensity

2017 ◽  
Vol 32 (2) ◽  
pp. 93-103
Author(s):  
Amit K. Ghosh
Keyword(s):  
Decision Making ◽  
Product Category ◽  
Relative Price ◽  
Grocery Stores ◽  
Consumer Decision Making ◽  
Content Type ◽  
Household Level ◽  
Packaged Goods ◽  
Package Size ◽  
The Impact

Purpose The constantly changing prices, promotions, and packaging options have made decision making more complex for consumers of packaged goods. The purpose of this paper is to explore how price and promotions influence consumer propensity to buy a certain package size. Design/methodology/approach Scanner panel data for shelf-stable salad dressing obtained from Information Resources Inc. were used to compute the proportion of large packages bought, the relative price paid for large packages, propensity to use various types of promotions, and a behavioral covariate for each household. Data of over 5,600 households were analyzed using a multiple regression analysis for hypothesis testing. Findings The positive nature of relationship between the relative price of large packages and the proportion of large packages bought demonstrates the suboptimal nature of consumer decision making. The inefficiency is partially attributable to the abundance of promotions, to consumers’ lack of price awareness, and to the use of heuristics by consumers. Also, consumers who are prone to use promotions such as displays and temporary price reductions tend to purchase larger packages. They are more likely to buy impulsively and base their decisions on heuristics. In contrast, consumers who are influenced by featured price cuts and who utilize coupons tend to purchase smaller packages. Research limitations/implications Data were obtained from grocery stores; only a single product category was studied. Practical implications Offer coupons and advertise featured price cuts on small packages to increase the sales of smaller packages. To move large packages successfully, retailers should rely more on in-store displays and temporary price reductions. Originality/value The impact of price and promotions on package size propensity has never been investigated. This study is also one of the few that uses a household-level analysis based on observable purchase data for consumer packaged goods.

scholarly journals An Extended Model of Behavioural Process in Consumer Decision Making

2016 ◽  
Vol 8 (4) ◽  
pp. 87 ◽  
Author(s):  
Nagasimha Balakrishna Kanagal
Keyword(s):  
Decision Making ◽  
Consumer Products ◽  
Extended Model ◽  
Response Model ◽  
Consumer Decision Making ◽  
Consumer Decision ◽  
Stimulus Response ◽  
Economic Decision Making ◽  
Buying Behaviour ◽  
The Impact

<p>The stimulus response model of consumer behaviour is useful to understand the buying behaviour of individual consumers in the context of individuals buying consumer products. An extended stimulus-response model of behavioural processes in consumer decision making is proposed that serves to integrate the influences and interlinkages of buyer psychology, various buyer characteristics, and the impact of the buyer decision process on consumer decision making. The model proposes that the behavioural process of consumer decision making be as a result of the interaction of three aspects of individual buyer behaviour: communication sensitivity; enculturated individuality; and rational / economic decision making. The paper addresses the flip side of the consumer decision making process in terms of the five stages of decision making from need recognition to post-purchase satisfaction. An aggregate level framework of behavioural process in consumer decision making has been provided, that could lead to a richer analysis of micro level factors and relationships influencing consumer decision behaviour.</p>

scholarly journals Consumer decision-making in a multi-generational choice set context

2001 ◽  
Vol 53 (3) ◽  
pp. 123-136 ◽  
Author(s):  
Namwoon Kim ◽  
Rajendra K Srivastava ◽  
Jin K Han
Keyword(s):  
Decision Making ◽  
Consumer Decision Making ◽  
Consumer Decision ◽  
Choice Set Context ◽  
Choice Set

Impact of Digital Communication on Consumer Behaviour Processes in Luxury Branding Segment

2018 ◽  
pp. 132-157
Author(s):  
Harsha Gupta
Keyword(s):  
Decision Making ◽  
Consumer Behavior ◽  
Consumer Behaviour ◽  
Digital Communication ◽  
Consumer Decision Making ◽  
Online Questionnaire ◽  
Consumer Decision ◽  
Luxury Branding ◽  
Buying Behaviour ◽  
The Impact

With a boom in digital marketing and the luxury sector in India, research in both the segments have become crucial for mining insights that guide consumer buying behaviour. However, both these constructs are comparatively new and have not been researched much. Hence, research in this field will help marketers across the corporate and academic sectors to understand deeper insights about consumer decision making process. This research will help in understanding how different vehicles of digital communication impact consumer behavior processes in the luxury brand apparel segment. The data for this research has been collected using an online questionnaire from respondents across India. Hence, this chapter will enable the readers in identifying which digital vehicles are most suitable for the different stages of the consumer behaviour process when marketing to luxury consumers; identifying the ranking of digital vehicles during consumer buying behaviour process; and analyzing the impact of various digital communications at different stages of the consumer behaviour process.

scholarly journals The impact of product presentation on decision-making and purchasing

2019 ◽  
Vol 22 (3) ◽  
pp. 365-380 ◽  
Author(s):  
Rosy Boardman ◽  
Helen McCormick
Keyword(s):  
Decision Making ◽  
Eye Tracking ◽  
Visual Information ◽  
Age Groups ◽  
Target Market ◽  
Consumer Decision Making ◽  
Consumer Decision ◽  
Content Type ◽  
Product Presentation ◽  
The Impact

Purpose This paper aims to investigate how apparel product presentation influences consumer decision-making and whether there are any differences between age groups. Design/methodology/approach A mixed methodology was used including eye-tracking and qualitative in-depth interviews, with a purposive sample of 50 participants between age 20 and 70. Findings A higher number of product presentation features resulted in increased positive visual, cognitive and affective responses as consumers wanted as much visual information as possible to aid decision-making. Images of models attracted the most attention and were the most influential product presentation feature, followed by mannequin images and the zoom function. The 20 s spent much less time viewing and interacting with the product presentation features than middle age groups (30 s-50 s), had minimal fixations on mannequin images and had a much quicker decision-making process than other age groups. Practical implications The research informs retailers which product presentation features are the most effective for their target market to aid consumer decision-making with the aim of reducing returns. Originality/value The paper contributes to the literature by providing more in-depth insights than previous studies into the impact of online product presentation on consumer decision-making by using qualitative research and eye-tracking. The research also explores more product presentation features than previous research and investigates the presentation of apparel products, which are notoriously the most difficult products for consumers to assess online. The research is unique in its exploration of age differences in relation to product presentation features.

Complicating or simplifying? Investigating the mixed impacts of online product information on consumers’ purchase decisions

2019 ◽  
Vol 30 (1) ◽  
pp. 263-287
Author(s):  
Yan Yu ◽  
Ben Qianqian Liu ◽  
Jin-Xing Hao ◽  
Chuanqi Wang
Keyword(s):  
Decision Making ◽  
Product Information ◽  
Purchase Decisions ◽  
Decision Strategy ◽  
Market Outcomes ◽  
Content Type ◽  
Decision Bias ◽  
Set Size ◽  
Product Presentation ◽  
Choice Set

Purpose Prior literature indicates conflicting effects of online product information, which may complicate or simplify consumer purchase decisions. Therefore, the purpose of this paper is to investigate how different online product information (i.e. the choice set size and the popularity information and its presentation) affect consumers’ decision making and the related market outcomes. Design/methodology/approach This research relies on information-processing theories and social learning theory. By stepwise conducting two 2×2 within-subject factorial design experiments, this research examines the effects of the choice set size, product popularity information and product presentation on consumers’ decision making and the aggregated market outcomes. Findings The results show that product popularity information led consumers to either simplify or complicate their decision strategy, depending on the size of the choice sets. Additionally, presenting products by their popularity in descending order resulted in consumers making decisions with a larger decision bias. The results also show that the presence of product popularity was more likely to forge a “superstar” structure in a large market. Practical implications The research suggests that e-retailers and e-marketplace operators should carefully utilize product popularity information. Multiple mechanisms that shape different shopping environments with different orders are necessary to create a long-tailed market structure. Originality/value This study found the mixed effects of product popularity information when it is presented in different environments (i.e. the large/small choice set and the sorted/randomized product presentation). The overuse of popularity information may induce consumers’ decision bias.

scholarly journals Medicare Beneficiaries and the Impact of Gaining Prescription Drug Coverage on Inpatient and Physician Spending

2005 ◽  
Vol 40 (5p1) ◽  
pp. 1279-1296 ◽  
Author(s):  
Becky A. Briesacher ◽  
Bruce Stuart ◽  
Xiaoqang Ren ◽  
Jalpa A. Doshi ◽  
Marian V. Wrobel
Keyword(s):  
Prescription Drug ◽  
Drug Coverage ◽  
Prescription Drug Coverage ◽  
Medicare Beneficiaries ◽  
The Impact
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