Executive Summary
Consumers often face decisions that involve trade-offs between costs and benefits that are distributed over time. One example of such a decision that gained importance with the emergence of online shopping is the timing–cost trade-off of shipping. A recent survey indicated that in online purchase of consumer electronics, 35% of the consumers are concerned about the shipping costs, and approximately 23% are bothered by the delivery times. Given the pervasiveness of decisions about consumption timing, it is important to examine factors that affect consumers’ evaluation of such decisions. Understanding how tolerant consumers are to delays and the cost they are willing to incur to avoid them has important implications for various decisions pertaining to costs and benefits over time.
In the current article, the authors show that the way intertemporal decisions are framed has a significant impact on consumers’ preferences for consumption timing. The authors propose a framework that describes why temporal framing of a timing decision (delay versus expedite) would lead to differences in preference. In line with this framework, the findings suggest that the concreteness in which consumers mentally represent the product increases their willingness to pay to avoid delays (i.e., increases consumer impatience).
The authors demonstrate that if customers’ default is to have a product immediately, they not only will pay more to avoid delaying the receipt of their item but also will disproportionately value shorter delays (this is referred to as “present bias”). For example, in such situations, a four-day delay will not be twice as bad as a two-day delay but rather will only be slightly more aversive. However, the authors also show that this is no longer the case if the default is to have a product in the future. Specifically, if a decision is framed as a decision to expedite, consumers will show less impatience than they will with a delay scenario, resulting in more proportional valuation of different waiting periods.
These findings indicate that it is important for companies to understand the psychological effects that temporal framing of options has on consumers. Using delay frames might increase consumers’ willingness to incur costs to avoid very short delays, even when the companies would prefer the consumers to be patient. For example, in the case of possible stockouts, companies often want consumers not to rush orders and to try to avoid dissatisfaction due to the delay. The results of the three experiments reported in this article suggest that under such circumstances, it might be more beneficial to use an expedite frame in presenting delivery options. The authors further suggest that the difference in impatience under the two temporal frames is related to the concreteness of mental representation, which can be under the influence of firms, at least to some extent. For example, by providing consumers with vivid pictures or concrete definitions of immediate benefits, companies can alter consumers’ representations and their subsequent level of impatience.
This article demonstrates that different temporal frames (delay versus expedite) lead to different degrees of bias toward the present. The findings further show that the reason for this difference is related to the level of mental representation associated with each temporal frame.
Biography
Selin A. Malkoc is Assistant Professor of Marketing in the Carlson School of Management at the University of Minnesota. She holds a BA in Business Administration from Bilkent University, Turkey. Her research focuses on the role of concreteness of mental representations and of information processing in consumer evaluation. She also works on understanding how intuitions are used in consumer decision making. Her research has appeared in Psychological Science.
Gal Zauberman is Associate Professor of Marketing in the Wharton School at the University of Pennsylvania. He received a BA in Psychology and Economics from the University of North Carolina, Chapel Hill, in 1994 and a PhD in Marketing from Duke University in 2000. His research has been published in Journal of Behavioral Decision Making, Journal of Consumer Research, Journal of Experimental Psychology: Applied, Journal of Experimental Psychology: General, Management Science, Organizational Behavior and Human Decision Processes, Psychological Science, and Vision Research. For more information, see http://www.unc.edu/~gal/.
J Marketing Research, Volume 43, Number 4, November 2006
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