Date of Degree

2007

Document Type

PhD diss.

Degree Name

PhD (Doctor of Philosophy)

Department

Business Administration

First Advisor

Dhananjay Nayakankuppam

Abstract

In everyday life, we often encounter groupings of objects. It could be a group of products kept on a retail shelf, food items in a shop window or depictions of groups of objects or people in an advertisement. However, very little attention has been paid to how these different groupings could influence consumer decisions. The main aim of this article is to study the influence of such groupings on consumer choice and behavior.

A new phenomenon is presented that studies the influence of gestalt grouping of objects, such as economy, symmetry, and similarity in different consumer decision domains. Specifically, it is proposed that when each object in two groups has an equal chance of a gain (for instance, one in 10 has a gift coupon), then people prefer to select an object from the group with better gestalt features. However, when each object in two groups has an equal chance of a loss (for instance, one in 10 is defective), then people prefer to select an object from the group with worse gestalt features. Normative theory would predict that people should be indifferent between the two groups. However, this article demonstrates that people utilize spatial grouping, a non-informative factor, as a cue in their preferences. I call the differential influence of groupings on decisions the cooler effect.

The cooler effect in the gain and loss domains is demonstrated in experiments 1 and 2. Both experiments use different domains of product choice and a game of chance to test the robustness of the findings. Subsequently, an underlying process utilizing gestalt theory and contagion theory is proposed. Further three alternate accounts are presented - motivational reasoning, contagion by itself being sufficient, and gestalt perception by itself being enough. Experiments 4 and 5 test the proposed account, rule out the alternate accounts, and moderate the differential influence of spatial grouping on choice in the domain of gains and losses. Finally, theoretical and managerial implications are presented.

Pages

ix, 74

Bibliography

70-74

Copyright

Copyright 2007 Arul Mishra