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Please use this identifier to cite or link to this item:
http://hdl.handle.net/1783.1/992
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| Title: | Reference dependence and loss aversion in the evaluation of brands for choice set inclusion and for selection |
| Authors: | Han, Sangman
Vanhonacker, Wilfried R. |
| Keywords: | Brand choice
Reference dependence
Loss aversion
Choice set
Agendas |
| Issue Date: | Dec-1998 |
| Series/Report no.: | Marketing Working Paper Series ; MKTG 98.129 |
| Abstract: | The dynamic process by which a consumer arrives at a choice decision is generally believed to be a process during which the formation of a choice set precedes the selection of a brand. This research looks at the role of multiattribute reference points in the evaluation of brands for choice set inclusion and for final selection. We conceptualize the creation of a choice set as following either a top-down or a bottom-up approach and reference dependence as confined to the brand evaluations underlying the "tough" decisions (i.e., the choice-set-formation decisions when the choice set is created following a top-down approach, and the brand-selection decision when the choice set is created following a bottom-up approach). With a unique data set, we find empirical support for a bottom-up choice-set-formation process based entirely on absolute attribute evaluations, followed by a brand-selection process based on relative brand evaluations that exhibit loss aversion. Accordingly, multiattribute reference points and asymmetry in evaluating losses versus gains only arise once self-imposed constraints in cognitive processing have been used to identify the choice set. Implications of these results are discussed. |
| URI: | http://hdl.handle.net/1783.1/992 |
| Appears in Collections: | MARK Working Papers
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Size | Format |
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| mktg98129.pdf | | 3396Kb | Adobe PDF | View/Open |
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