Understanding consumer decisions using behavioural economics

E.H. Zandstra, K.P. Miyapuram, P.N. Tobler

Research output: Chapter in Book/Report/Conference proceedingChapterScientificpeer-review

Abstract

People make many decisions throughout the day involving finances, food and health. Many of these decisions involve considering alternatives that will occur at some point in the future. Behavioural economics is a field that studies how people make these decisions (Camerer, 1999)[[Au: The reference “Camerer (1999)” is cited in the text but not listed. Please check.]]. It shows that people are driven by short-term gratification (reward or benefit). For example: given a choice between choosing $5 now or $10 in 2 weeks, people tend to choose the sooner, smaller reward. But choosing the delayed reward, i.e. delaying gratification, can actually be beneficial in the long term. How can we motivate consumers to resist the ‘now’ and invest in their future (e.g. develop sustainable or healthy habits)? In our current research we performed a laboratory experiment, in which we examined whether we can increase the perceived value of a (delayed) environmental benefit using tailored communication, i.e. change the way it is framed. More specifically, we investigated whether we can boost the value of an abstract, long-term green claim in a product by expressing it as a concrete, short-term benefit. We confirmed our hypothesis that by appropriately communicating the green claim, we can boost the perceived value of it. Therefore, to motivate consumers to buy a product with an environmental benefit, it needs to have a green claim expressed as a concrete and short-term benefit.
Original languageEnglish
Title of host publicationDecision Making
Subtitle of host publicationNeural and Behavioural Approaches
EditorsC. Pammi, N. Srinivasan
PublisherElsevier
Pages197-211
Number of pages536
ISBN (Print)9780444626042
Publication statusPublished - 2013

Publication series

NameProgress in Brain Research
Number202

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Concretes
Economics
Finance
Health
Communication
Experiments

Cite this

Zandstra, E. H., Miyapuram, K. P., & Tobler, P. N. (2013). Understanding consumer decisions using behavioural economics. In C. Pammi, & N. Srinivasan (Eds.), Decision Making: Neural and Behavioural Approaches (pp. 197-211). (Progress in Brain Research; No. 202). Elsevier.
Zandstra, E.H. ; Miyapuram, K.P. ; Tobler, P.N. / Understanding consumer decisions using behavioural economics. Decision Making: Neural and Behavioural Approaches. editor / C. Pammi ; N. Srinivasan. Elsevier, 2013. pp. 197-211 (Progress in Brain Research; 202).
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Zandstra, EH, Miyapuram, KP & Tobler, PN 2013, Understanding consumer decisions using behavioural economics. in C Pammi & N Srinivasan (eds), Decision Making: Neural and Behavioural Approaches. Progress in Brain Research, no. 202, Elsevier, pp. 197-211.

Understanding consumer decisions using behavioural economics. / Zandstra, E.H.; Miyapuram, K.P.; Tobler, P.N.

Decision Making: Neural and Behavioural Approaches. ed. / C. Pammi; N. Srinivasan. Elsevier, 2013. p. 197-211 (Progress in Brain Research; No. 202).

Research output: Chapter in Book/Report/Conference proceedingChapterScientificpeer-review

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AB - People make many decisions throughout the day involving finances, food and health. Many of these decisions involve considering alternatives that will occur at some point in the future. Behavioural economics is a field that studies how people make these decisions (Camerer, 1999)[[Au: The reference “Camerer (1999)” is cited in the text but not listed. Please check.]]. It shows that people are driven by short-term gratification (reward or benefit). For example: given a choice between choosing $5 now or $10 in 2 weeks, people tend to choose the sooner, smaller reward. But choosing the delayed reward, i.e. delaying gratification, can actually be beneficial in the long term. How can we motivate consumers to resist the ‘now’ and invest in their future (e.g. develop sustainable or healthy habits)? In our current research we performed a laboratory experiment, in which we examined whether we can increase the perceived value of a (delayed) environmental benefit using tailored communication, i.e. change the way it is framed. More specifically, we investigated whether we can boost the value of an abstract, long-term green claim in a product by expressing it as a concrete, short-term benefit. We confirmed our hypothesis that by appropriately communicating the green claim, we can boost the perceived value of it. Therefore, to motivate consumers to buy a product with an environmental benefit, it needs to have a green claim expressed as a concrete and short-term benefit.

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Zandstra EH, Miyapuram KP, Tobler PN. Understanding consumer decisions using behavioural economics. In Pammi C, Srinivasan N, editors, Decision Making: Neural and Behavioural Approaches. Elsevier. 2013. p. 197-211. (Progress in Brain Research; 202).