Making choices based on the context of choice set: Context effects in tourism products

Jeong-Yeol Park, Purdue University

Abstract

Traditionally, consumers are known to make their decisions based on the rationality assumption, which posits that people have ability to find an option with maximum utility. However, people oftentimes rely on their heuristics when they are to make a choice, and this notion is the opposite of the rationality assumption. Specifically, when people are faced with a choice set, which includes middle option between two extreme options, or an option that asymmetrically dominates other option, consumers often make a biased choice. This phenomenon has been termed as the context effect, and it has been identified in various consumer behavior literatures. Though its importance has been stressed out in other research areas, tourism related decision-making models have focused on rationality assumption but have neglected context effects, which is based on consumers' bounded rationality. Thus, this study was designed to examine whether or not potential travelers' choice patterns differ when they are provided a context dependent choice set, and to identify latent constructs that can attenuate or facilitate susceptibility to the context effects. To fulfill these objectives, three different scenarios were constructed and randomly assigned to participants. The results suggested that when context-dependent choice sets were assigned, participants showed different choice patterns compared to the situation that no context-dependent choice set was provided. Specifically, participants were assigned to the choice set based on attraction effect, the relative choice share for the choice induced product was significantly larger than when they were assigned to the choice set based on compromise effect. Further, participants' expertise significantly decreased susceptibility to the context effects, but involvement and trade-off difficulty significantly increased susceptibility. Additionally, the moderating effects by different context effects (i.e., compromise and attraction effects) were hypothesized. Results suggested that the influences of expertise and trade-off difficulty on susceptibility to the context effects differed by the type of context effects. Specifically, when participants were assigned to the scenario based on the compromise effect, participants' trade-off difficulty significantly increased the susceptibility, but expertise did not. Comparably, in terms of attraction effects, participants' expertise significantly reduced the susceptibility but trade-off difficulty did not. The results of this study are expected to provide important implications for existing decision-making literature in tourism as well as managers or owners of online travel agencies. Further discussion and implications are provided in the main body of this paper.

Degree

Ph.D.

Advisors

Jang, Purdue University.

Subject Area

Marketing

COinS