BE101x: Consumption Vocabulary

What is a consumption vocabulary?

•In many domains, people know their preferences but cannot articulate or express exactly why they like what they like

–Examples: Wine, objects of art, classical music, quilts, carpets

•This is because they either

–Don’t really know why they like certain options, it might be because of a combination of a large number of factors (a gestalt evaluation)

–If they did, they do not have the words to
		express their preferences

Consumption vocabulary

•Suppose we provided people with the attributes underlying preferences. For instance, here are some attributes that underlie the preference of quilts:

–Border; Sashing; Blocks; Alignment; Arrangement; Placement; Style; Colour dominance

–West, P., C. Brown and S. Hoch (1996), Journal of Consumer Research

•This is called the provision of a consumption vocabulary

Consumption vocabulary

•What the provision of a consumption vocabulary do?

•Remember that a rational decision maker computes overall utility by adding up the product of importance weights and level across each attribute. Or, U = Sum of w * x across all attributes

•If the decision maker doesn’t know the attributes, they cannot follow this route

•Providing them with a vocabulary gives them a framework for assessing the utility of the object

Preference decomposition

•Suppose a group of participants were given a large number of quilts to evaluate

•These were formed by fully crossing all the levels of the attributes (factors) listed earlier

•The participants’ task is to evaluate each quilt on an overall LIKING score

•We can now estimate the following model for each participant:

•LIKING = a + b1 (Border) + b2 (Sashing) + b3 (Blocks) + b4 (Arrangement) + ……

•We have told that participant why they like what they like. Participants can now start finetuningtheir preferences

The benefits of a consumption vocabulary

•West, Brown and Hoch found that the provision of a consumption vocabulary

–Allows people to better express preferences

–Allows people to learn and finetune their own preferences better over time

–Results in more stable preferences. By enabling the use of an attribute-based system for making choices, preferences are less erratic