COURSEWORK FLASHCARDS

Question 1

What is the title of paper 1 called?

Answer 1

The Paradox of Choice: Why more is Good and too much is terrible

Question 2

Who are the authors behind Paper 1?

Answer 2

Allender et al

Question 3

What is the hypothesis in paper 1?

Answer 3

Whether consumers have a finite optimal number of products they will search through (so if consumers like to have more or less choice)

Whether this is altered based on the search costs associated with searching a variety of products

Question 4

What is the method for Paper 1?

Part 1

Answer 4

76 participants assigned to two groups of buying and selling (2 sellers : 4/5 buyers)
- Revolving around selling/buying widgets (each differentiated)

Question 5

What is the method for Paper 1? (Part 2)

Answer 5

• The brand loyalty for each widget was consistent across all buyers throughout the entire experiment, and known to sellers- So buyers had brand loyalty but might be persuaded to buy something else depending on price
• Sellers had the opportunity to keep just one widget or buy all 5 different widgets from other buyers- but with an inventory cost(trade-off between offering more variety, but having to stock shelves more frequently resulting in more costs)

Question 6

What did Paper 1 find?

Answer 6

Buyers search less when cost of search is high (negative correlation between search intensity and the buyers search cost (0:225) as well as the number of products offered (0:243))

Also sellers increased the number of unique Widgets offered, buyers were more likely to spend their entire budget on that seller and not view the products offered by the other seller. (So, paradox of choice shown across other sellers).

Question 7

What are the key points behind paper 1?

Answer 7

Differing prices can offset the paradox of choice. If buyer search cost offset by sellers high prices.

Variety can be used a tool to stay competitive

Question 8

What is the overall statement surrounding paper 1?

Answer 8

When the cost of search is small, consumers prefer a wider choice set, and as the cost of search increases, the demand for variety falls because searching a large number of options is too costly

Question 9

What are the benefits of paper 1?

Answer 9

• Analyses the paradox of choice surrounding key variables of search cost, brand loyalty and prices
• Data sourced from own experiment so no real interpretation needed
• Method was practical and applied more to real life
• Analyses the result to apply to real life scenarios and how it can be used

Question 10

What are the weaknesses of Paper 1?

Answer 10

• Data sourced from own experiment–> likelihood of bias
• Strong focus on search costs may mask the underlying effects of paradox of choice
• Simplifies Choice Overload

Question 11

What is the name of Paper 2?

Answer 11

The “Tyranny of Choice”: Choice Overload as a Possible Instance of Effort Discounting

Question 12

Who are the authors of Paper 2?

Answer 12

Reed et al

Question 13

What is the hypothesis of paper 2?

Answer 13

Whether the paradox of choice occurs in situations faced by human service workers

Question 14

What is the method behind Paper 2? (Part 1)

Answer 14

146 employees recruited from services looking after people with autism and other developmental issues.

Study employed 2 questionnaires based on Maximisation and Regret Scales (To analyse post decision utility)

Participants asked to imagine having to find suitable resident treatment programme for hypothetical student they worked with

Question 15

What is the method behind Paper 2? (Part 2)

Answer 15

Given 3 scenario options where participant could choose to have
a) Single option (Only one programme available)
b) Limited Options (Two programmes)
c) Extensive Options (More than two)
Number of programmes in extensive would increase geometrically across trials (3,6,12,24 etc.)

Given 15 seconds to choose.

Question 16

What did Paper 2 find?

Answer 16

Participants almost never selected the single- option scenario (selected by fewer than 5% of participants in all conditions), instead selecting more often the limited- options scenario.

When the extensive options scenario incorporated only three treatment options, compared to the two in the limited options scenario, about 86% of participants chose the extensive options scenario
Number of options (and, presumably, search costs) doubled to six for the extensive options scenario, only about 48% of participants

as the number of options in the extensive- options scenario increased, preference for this scenario decreased.

Maximization Scale, 17 participants (about 12% of the sample) exhibited a satisficing profile, and 12 participants (about 8% of the sample) exhibited a maximizing profile

Question 17

What are the key points behind paper 2?

Answer 17

both Satisficers and Maximizers exhibited the same general pattern of preference as the overall sample by rarely selecting the single-option scenario and by preferring Options Satisficers, Maximizers Proportion Preferring Option

Question 18

What are the benefits of Paper 2?

Answer 18

• Shows not only the extent to which the paradox of choice can be seen but also the post decision utility
• Focusing on effort
• Unlike paper 1 which used an experiment around a real life scenario, paper 2 full delves into the service industry and analyse paradox of choice from there (Looking more into real life)
• Simple methodology tidies room for errors
• Having 3 choices expands the result set

Question 19

What are the weaknesses of Paper 2?

Answer 19

• By analysing simply one industry can be argued that the whole principle is flawed
• ## Again can be argued that there are biases

Question 20

What is the name of Paper 3?

Answer 20

Mitigating Choice Overload: An Experiment in the U.S. Beer Market

Question 21

Who are the authors of Paper 3?

Answer 21

Malone and Lusk

Question 22

What is the hypothesis of Paper 3?

Answer 22

To identify the prevalence of choice overload in the US beer market and whether search cost-reducing nudges influence this

Question 23

What is the method behind Paper 3? (Part 1)

Answer 23

• Online experiment with 1,697 survey respondents
• Varied number of options (5 -or 18)
• Search cost-reducing nudge (a control menu, a special menu, and a Beer Advocate scores menu)
• People given a choice at a restaurant tablet, responses measured

Question 24

What is the method behind Paper 3? (Part 2)

Answer 24

-Half of the respondents received all 5 treatment options first, followed by the 18 treatment options, while the other half of the respondents became the control with 5 then 18 options, then the special with 5 then 18, then the scores with 5 then 18.

Question 25

What did Paper 3 find? (Part 1)

Answer 25

Number of times beer not chosen:
Control Menu/ 5 Options: 35.6%
Control Menu/ 18 options: 25.8%

Special Menu/5 Options: 31.5%
Special Menu/ 18 Options: 23.5%

Beer Advocate menu/5 Options: 27.6%
Beer advocate menu/ 18 Options: 22.3%

Question 26

What did Paper 3 find? (Part 2)

Answer 26

Do not find CO to be the case overall, as in the control menu, 35.6% of participants did not select a beer from the 5-option menu and 25.8% did not select a beer in the 18-option menu.
In this case, more options increased the chance of purchase. Only 39 people (of 1,697) selected “none” with the 18-option control menu and then bought a beer in the five-option menu.

Question 27

What are the strengths of Paper 3?

Answer 27

• To ensure accurate results multiple tests ran –> Including seeing the mouse clicks and via confidence intervals
• Analysing a market condition
• Simplified methodology to reduce errors

Question 28

What are the weaknesses of Paper 3?

Answer 28

• In a real market environment, CO might be more problematic
• Even if participants chose “something else,” this does not imply the absence of a CO
• 5 and 18 options are arbitrary