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Does the procedure matter?

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  • Lin, Lihui

Abstract

When searching for which products to buy, consumers are typically bombarded with options. Some suppliers try and simplify the issue of decision-making for their potential buyers in some way. One typical procedure used to ease the decision-making process for potential customers is to present the products in sequential pages and request shoppers to select an item from each page, entering them into a wish list from which the final choice will be made. This study experimentally investigates how the final decision is affected by the number of items on each page and, hence, by the number of items in a wish list. The parameters of a stochastic model are estimated to ‘explain’ the data, in particular, examining the noisiness of the choices at each stage. The results show that procedure matters and that the trade-off between an increased number of options per page and an increased number of pages is indeed influential.

Suggested Citation

  • Lin, Lihui, 2021. "Does the procedure matter?," Journal of Behavioral and Experimental Economics (formerly The Journal of Socio-Economics), Elsevier, vol. 90(C).
    • Handle: RePEc:eee:soceco:v:90:y:2021:i:c:s2214804320306613
    DOI: 10.1016/j.socec.2020.101618
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    References listed on IDEAS

    as
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    More about this item

    Keywords

    Sequential Decision-Making; Online Behaviour; Choice Overload; Experiment; Stochastic Risk Aversion;
    All these keywords.

    JEL classification:

    • C91 - Mathematical and Quantitative Methods - - Design of Experiments - - - Laboratory, Individual Behavior
    • D91 - Microeconomics - - Micro-Based Behavioral Economics - - - Role and Effects of Psychological, Emotional, Social, and Cognitive Factors on Decision Making
    • O33 - Economic Development, Innovation, Technological Change, and Growth - - Innovation; Research and Development; Technological Change; Intellectual Property Rights - - - Technological Change: Choices and Consequences; Diffusion Processes
    • D81 - Microeconomics - - Information, Knowledge, and Uncertainty - - - Criteria for Decision-Making under Risk and Uncertainty

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