November 2005
Risky business: Consumer risk influenced by level of enjoyment in sequential activities
Imagine an evening out with friends. You've enjoyed a phenomenal dinner, and the night is going great. You're now faced with deciding on a dessert. You've been to this restaurant before and know that the tiramisu is reliable, but the cheesecake can be sometimes exceptional but other times sub par. Which do you pick?
According to forthcoming study in the December 2005 issue of the Journal of Consumer Research, you will most likely go for the cheesecake. When things are going well, explain researchers from Yale University, consumers are willing to take risks with subsequent decisions in order to really have a home run of an evening � whether it's the play you see, the restaurant you choose, or the dessert you order.
"The present research provides evidence that consumers are more likely to go for the risky restaurant when the play went well and they are trying to have a really great evening. When the evening is off to a bad start, consumers are more likely to opt for the reliable restaurant to guarantee themselves at least some enjoyment," explain Nathan Novemsky and Ravi Dhar. "We find this pattern of choices for a variety of goals including enjoyment, health, getting to work, etc.,"
But despite the fact that choices such as these are being made every instant by consumers everywhere, the authors point out that very little previous research has been done to better understand consumer behavior in this regard.
"Given that most consumer choices are made as part of a sequence of related decisions, it is somewhat surprising how little attention has been directed at consumer choices between certain and variable options in the context of an ongoing sequence," write Novemsky and Dhar.
Novemsky, Nathan and Ravi Dhar. "Goal Fulfillment and Goal Targets in Sequential Choice." Journal of Consumer Research, Dec 2005.