How Context Affects Choice

Abstract

Due to its origins in the literature on judgment and decision-making, context effects in marketing are construed exclusively in terms of how choices deviate from utility maximization principles as a function of how choices are presented (e.g., framing, sequence, composition). This limits our understanding of a range of other relevant context effects on choice. This paper broadens the scope of context effects to include social (e.g., with friends or family) and situational factors (e.g., location (home/store), time, weather).We define contexts as any factor that has the potential to shift the choice outcomes by altering the process by which the decision is made. We use this lens to integrate the psychology literature on habitual choice, System I and II decision-making, and a recent stream of empirical work that involves social and situational effects into the scope of context effects. We distinguish between exogenous and endogenous context effects, based on whether the decision-maker chooses the context. We then discuss issues of empirically identifying context effects when using either experimentally generated data or naturally occurring secondary data. We conclude with a discussion of trends and opportunities for new research on context effects.

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Notes

  1. 1.

    In some cases, the line between innate preferences and other decision processes might be blurred, such as under the theory of context-dependent constructed preferences [8].

  2. 2.

    One could argue that the EBA strategy is rather conscious and intentional, and as such should be characterized as Type 2 processing. However, Shah and Oppenheimer [68] classify it as a heuristic that examines fewer cues, integrates less information, and examines fewer alternatives than under a fully compensatory model in System 2. In addition, both intuitive (System 1) and deliberate (System 2) thinking can be conscious and nonconscious in nature (Evans and [24]).

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Correspondence to Raphael Thomadsen.

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This paper is based on the presentations and discussions in the “How Context Affects Choice” workshop at the 2016 Choice Symposium held at Lake Louise, AB, Canada.

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Thomadsen, R., Rooderkerk, R.P., Amir, O. et al. How Context Affects Choice. Cust. Need. and Solut. 5, 3–14 (2018). https://doi.org/10.1007/s40547-017-0084-9

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Keywords

  • Context dependence
  • Choice
  • Behavioral decision-making
  • Consumer behavior
  • Moderating variables
  • Information processing