Deferring Choice The study of Tversky and Shafir (1992):Tversky and Shafir (1992): Contributor© POSbase 2007 The American retailer Williams-Sonoma offered.

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Presentation transcript:

Deferring Choice The study of Tversky and Shafir (1992):Tversky and Shafir (1992): Contributor© POSbase 2007 The American retailer Williams-Sonoma offered a bread machine at a price of $275. After some years, the same company offered a new bread machine which cost $429 and could not bake wholewheat bread. It is not surprising that the new machine ( $429 ) did not sell well, but the sales for the original bread machine (275$) almost doubled.

Deferring Choice © POSbase 2007 Suppose you are considering buying a compact disk (CD) player, and have not yet decided what model to buy. You pass by a store that is having a one-day clearance sale. They offer a popular SONY player for just $99, well below the list price. Do you buy the SONY player or wait until you learn more about the various models. 66% decided to buy 34% decided to wait

Deferring Choice © POSbase 2007 Suppose you are considering buying a compact disk (CD) player, and have not yet decided what model to buy. You pass by a store that is having a one-day clearance sale. They offer a popular SONY player for just $99, and a top- of-the-line AIWA player for just $159, both well below the list price. Do you buy the AIWA player, buy the SONY player, or wait until you learn more about the various models. 27% decided to buy the SONY player 27% decided to buy the AIWA player 46% decided to wait

Deferring Choice © POSbase 2007 If the “top-of-the-line AIWA player” was replaced by a less attractive CD player, no one chose the less attractive player. 76% decided to buy the SONY player 24% decided to wait. This mimics the mentioned sales of the bread machines by Williams-Sonoma.

Deferring Choice © POSbase 2007 In sum, if consumers have two equivalent options, they defer choice. This was also the case with real choices and no possibility for further search. If consumers have an excellent option compared to a less attractive option, they are less likely to defer choice. Summarized percentages of deferral: One option:34% Two equivalent options:46% One good, one bad:24% Deferring choice is important, as the next experiment shows:

Deferring Choice The authors offered students $5 for answering and returning a long questionnaire by a given date. One group was given 5 days to complete the questionnaire, a second group was given 3 weeks, and a third group was given no definite deadline. Returning rates: Five days:60% Three weeks:42% No deadline:25% © POSbase 2007