Cancelation efficiency: Why the effect of comparison direction strengthens with choice set size

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Abstract

Past research has shown that, when consumers compare two options, they pay more attention to one option (the focal option) and weigh its unique features more heavily than those of the other option. This leads to a stronger (weaker) preference for the focal option when each option has uniquely favorable (unfavorable) features. This research shows that the effect becomes more pronounced as the number of options increases. This is due to a higher efficiency in eliminating common attributes from the comparison when succeeding options are considered, which grants more extensive elaboration of the unique features of the focal option.

Research highlights

► We examine whether the direction-of-comparison effect persists as set size expands. ► We find the effect becomes more pronounced as choice set size increases. ► We delineate two potential mechanisms that account for this augmentation. ► We establish the more prominent effect is due to a higher efficiency in eliminating common attributes.

Introduction

Consumers often face the task of choosing among products that they encounter sequentially. For example, apartment renters examine potential locations one at a time, car buyers test drive their options one by one, and online shoppers who browse online catalogs click to view product descriptions successively. The comparison of sequentially presented products is sensitive to the direction in which they are compared (Houston and Sherman, 1995, Houston et al., 1989, Houston et al., 1991). Previous research has shown that, when two options are compared, the most recently observed option, typically the second one in a sequence, tends to receive more attention in the course of the comparison and serves as the focal option. Thus, consumers often prefer the second option to the first in pairs with unique positive features but prefer the first to the second in pairs with unique negative features (e.g., Houston et al., 1989, Houston et al., 1991, Kardes and Sanbonmatsu, 1993).

This effect, referred to as the direction-of-comparison effect (DOC effect), mainly has been demonstrated in a two-option setting. It is unclear whether the effect generalizes to situations with more options. In fact, a low likelihood of generalization may be expected based on theoretical arguments in previous research. For example, Mantel and Kardes (1999) suggest that the DOC effect emerges only when consumers employ an attribute-based comparison strategy and that this is a data-driven strategy that places high cognitive demands on decision makers, even with only two options. Based on these arguments, one would expect that increasing the number of options would reduce the capacity to conduct an attribute-based comparison, thereby reducing the likelihood of demonstrating the DOC effect. However, in our research, we show that the effect persists and becomes more pronounced as the size of a choice set increases. This enlarged DOC effect is due to a higher efficiency of eliminating non-diagnostic attributes from the comparison when succeeding options are considered, which grants more extensive elaboration of the unique features of these options. Consider, for example, the catalog in Fig. 1 that was extracted from the Cuisinart website. The catalog presents brief information of all the available options in the main menu. Consumers view these options, or a subset of these options, one at a time by clicking into the product specification page of each option. Previous research on the DOC effect has already suggested that a coffee maker with unique positive attributes can benefit from being the last one considered. In this research, we find that this effect is even more prominent when people sequentially consider many different coffee makers. The reason for this finding is that as consumers evaluate the options one by one, it becomes progressively easier to identify features that are common across the options (e.g., “Brew Pause feature,” “charcoal filter,” and “1–4 cup setting”), and hence it becomes easier to eliminate these attributes from the comparison. This would, in turn, lead to more extensive elaboration on the unique features of the latter options, resulting in a stronger DOC effect. To establish these findings, we will first review prior research on the DOC effect and discuss the possibility of observing (or not observing) it in choices among multiple options. We then report an experiment that demonstrated a more pronounced DOC effect as the size of a choice set increased. In a second experiment, we replicated these findings and further delineated the mechanism underlying the effect of set size on the magnitude of the DOC effect.

Section snippets

DOC effect and underlying mechanisms

Consumers' comparisons of two products depend on the product features, as well as on how consumers match and weigh those features in the course of the comparison. Houston et al., 1989, Houston et al., 1991 (see also Tversky, 1977) suggest a feature-matching model of preference judgments, in which consumers (a) cancel out features shared by the alternatives and (b) focus on the remaining unique features of the focal option.2

Experiment 1

This experiment was aimed at testing hypothesis 1. We employed a paradigm frequently used in prior literature to demonstrate the DOC effect (e.g., Houston and Sherman, 1995, Houston et al., 1989, Houston et al., 1991). The two sets of product descriptions featured either products with unique positive features and shared negative features (unique-positive condition) or products with unique negative features and shared positive features (unique-negative condition). We expected the DOC effect to

Experiment 2

Experiment 2 aimed at providing further insights into the effect of set size on the DOC effect. We tested the roles of cancelation efficiency and enlarged attention dispersion in causing the effect we observed in experiment 1. To do so, we manipulated cancelation efficiency such that we could test for (i) the downstream consequence of cancelation efficiency on the magnitude of the DOC effect and (ii) the enlarged attention dispersion effect when the effect of cancelation efficiency (if any) is

General discussion

The DOC effect is a systematic bias that reverses preferences when people compare options on the basis of their attributes. Findings related to the DOC effect have important implications for various marketing situations in which consumers learn about products in a sequential manner. However, previous research has only focused on the fundamentals of the effect (e.g., Houston and Sherman, 1995, Houston et al., 1989, Houston et al., 1991, Mantel and Kardes, 1999) without addressing its

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This research was supported by grant R-316-000-068-112 from the Academic Research Fund, National University of Singapore. The two authors contribute equally. The authors wish to thank the editor, the associate editor, and the two reviewers for their constructive comments. The authors also thank Xiuping Li for her valuable feedback on earlier versions of the manuscript. We would also like to thank Kelvin Chua from Taste Original for his assistance in data collection at the early stage of this research.

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