Consumers choice consistency as a result of information load variation in the decision environment

• Grant number: 15/21771-0
• Support Opportunities: Scholarships abroad - Research Internship - Doctorate
• Start date: June 05, 2016
• End date: February 15, 2017
• Field of knowledge: Applied Social Sciences - Administration
• Principal Investigator: José Afonso Mazzon
• Grantee: Luis Eduardo Pilli
• Supervisor: Joffre Swait Jr
• Host Institution: Faculdade de Economia, Administração e Contabilidade (FEA). Universidade de São Paulo (USP). São Paulo , SP, Brazil
• Institution abroad: University of South Australia (UniSA), Australia
• Associated to the scholarship: 15/03862-9 - Consumers choice consistency as a result of information load variation in the decision environment, BP.DR

Abstract

Judgment and decision is receives contributions from different scientific disciplines. Choice theory, specifically, is studied from three main approaches. The focus of this project is to study judgment and decision from the economic tradition, from de psychological or behavioral tradition and from the tradition that examines choice as observations revealing preferences, regardless the mental processes involved. The first objective is to develop the theoretical research, through a literature review. The initial elements are described in a particular section of the doctorate project. The second objective is, through the analysis of data collected for elaborating the MSc dissertation, to study the effects of information load on choice consistency. Elements from the three theoretical approached will be incorporated in the study of such a relevant issue to the field. Implicit to the empirical research plan, there is the development of a novel statistical model permitting the test of alternative hypothesis of a context variable (information load) over the choice consistency. The economic hypothesis implies stable preference, regardless context. Taking a deterministic perspective on decision, varying information load in the task environment shall have no effect on choice consistency. Considering, more realistically, choice as a stochastic process, consistency may be reduced only as a random error function, once that increasing option also increases a priori probability of errors. The behavioral hypothesis states that preference are constructed during the decision process and context elements shall influence choice consistency, as defined by the expected utility theory. Such influences are systematic and subject to prediction. Statistical models developed by academics from the third tradition named above, allow the hypothesis testing consistent to choice theory. Some characteristics define the relevance and justify the deployment of this doctoral project. The first is related to the theoretical aspects involved in this proposal. There is lack of convergence evidences, and a call for studies, among the three theoretical traditions described in this project. The micro economic theory has the purpose to support explanations for market equilibrium mechanisms, based on: a consumer theory and a firm theory grounded on maximization principles. Methods and research techniques were develop to address the specific objectives of micro economic theory. Behavioral decision theories are more recent and became prominent in the past decades. The behavioral economics discipline was created and included in the economy courses. Furthermore, an exponent of this tradition, coming from cognitive psychology, was awarded the economics Nobel Prize in 2002. However, the experimental methods bases on controlled manipulation of target variables allow for the study of reduced number of variables in each study. It maximizes the chance of effects occurrence that shall not be relevant in real marketplaces. The deployment of models proposed by third tradition academics allows for the direct opposition of the economic and the behavioral hypothesis, integrating the knowledge from the three different field. Finally, the social and managerial of this project is derived from studies indicating the negative effects of information overload on judgment and decision-making. In general, the increase in information load reduces the individual trust that best decision was made, decreases satisfaction with choice and increases the perception of unnecessary expenditure. Moreover, it leads to more choice regret and may be related to choice avoidance.