7Sins: #2 Narrow lenses

Editor’s note: Today we continue our series on the seven sins of consumer psychology from the presidential address of professor Michel Tuan Pham at the recent conference of the Society for Consumer Psychology. Read the introduction here.

Not only are the consumer topics that we choose to examine overly restricted, but the lenses that we use to examine these topics are overly thin. In the past 40 years, most of our research has been guided by cognitive and social psychology, and behavioral decision theory. Constructs that dominate our theorizing include attention, perception, categorization, information search, inference-making, cognitive responses, memory, attitudes, choice rules, heuristics and biases, and mental accounting. This type of research has produced a rather narrow and mechanical view of the consumer: “If we do X to consumers, then process P will be triggered, and outcome Y will take place. This mechanical view of the consumer fails to capture the true richness of how consumers actually operate.

concentric view of consumer behaviour

I like to think of consumer behavior theory as a series of concentric circles, each circle representing a different type of lens on consumer behavior. At the center is a mechanical core: the information processing and judgment machinery that the field has studied extensively. Outside this mechanical core is the affective layer: the feelings, moods, emotions, and affective preferences to which I have dedicated most of my research. We can think of the forces within this affective layer as shaping what happens within the mechanical core from the outside in: feelings influence judgment; mood influences memory, emotions influence time discounting, etc. Outside the affective layer is the motivational ground: this is where consumers’ goals, motives, needs, and values reside.

Again, we can think of the forces within this motivational ground as shaping what happens within the affective layer, and thereby what happens within the mechanical core. For example, the goals and needs that we have dictate to a large extent the feelings and emotions that we experience, which in turns affect how we process information and make judgments. Beyond the motivational ground, we reach the boundaries of the self, which are depicted here in yellow. The self is embedded within a social and relational context, where social influences, family membership, and social roles come into play. Finally, consumption behavior takes place within a broader cultural background that is shaped by language, norms, history, economic system, etc. Evolutionary forces can be seen as contributing to this cultural background as well. As depicted in the figure, forces from the outside layers shape the inner layers (the orange arrows), and conversely, operations of within the inner layers can affect the outside layers (the blue arrows).

This concentric view of consumer theory makes it clear that our theoretical perspectives are overly narrow, and put too much emphasis on behavioral decision theory, cognitive psychology, and social psychology (especially social cognition). Try to discuss consumer behavior with business professionals using only information processing and judgment and decision making principles, and you will soon realize how quickly they lose interest in this type of explanation. As consumer psychologists, we should be more willing to explore additional theoretical lenses, especially those that allow us to tap into the outer layers of the figure, for example, emotion theory and affect regulation research, basic motivation theory (and not just self-regulation theory), psycho-dynamic theory, role theory, personality psychology, group and family psychology, cultural psychology (and not just cross-cultural psychology), and evolutionary psychology. For example, very interesting work by Gad Saad, Vladas Griskevicius, and their colleagues is providing a very different and fresh perspective on consumer behavior using principles from evolutionary psychology. (This work is the subject of a research dialogue that is forthcoming in the July issue of JCP.)

A concentric view of consumer theory also encourages us to recognize that theories of consumer behavior are not necessarily mutually exclusive. An insidious form of the “sin of narrow lenses” in our field is an obsession with unique theoretical explanations. This obsession is often accompanied by a phenomenon that we might call “theoretical tyranny,” whereby reviewers insist that the authors differentiate their account from popular theories such as Prospect Theory, Construal Level Theory, or Regulatory Focus Theory, or re-express their findings in light of these theories.

Our obsession with unique explanation may be counterproductive for several reasons. First, many important and interesting consumption phenomena—for example, the attraction effect, self-control failures, or differences between Chinese and North-Americans in terms of food preferences—are clearly multiply determined. In fact, if a phenomenon is really uniquely determined, chances are that it is not that important to begin with (a point related to another sin discussed later). Second, many theories should be seen as complementary rather than competing in that they represent different levels of explanation. For example, a given bias in mental accounting may be driven by differences in attention to gains vs. losses, which would be a cognitive explanation. However, that attention mediates this bias does not preclude the possibility that motivational forces are also at work and direct attention to begin with, which would be a complementary motivational explanation. Third, the pressure to advance unique explanations has created a perverse incentive for authors to create artificial distinctions between their work and previous work, and an unhealthy tendency to preferentially cite work from other disciplines rather than work within our own discipline.

Finally, let’s not forget that theories are just theories. According to the Oxford dictionary, theories are “suppositions or systems of ideas intended to explain something” (New Oxford American Dictionary, 2010). In other words, they are not meant to be statements of categorical truth, they are only meant to provide coherence to the phenomena that we observed. Theories are just lenses that we use to internalize and generalize empirical observations about the external world. Therefore, we should be open to the co-existence of multiple theories rather than feel the constant urge to identify a single “best” theory. A good illustration is Chaiken and Trope’s (1999) edited volume titled “Dual-Process Theories in Social Psychology,” which catalogues 20 or so dual-process theories of attitudes, person perception, stereotyping, self-regulation, etc. These 20-some theories are correlated in that they are not conceptually independent and do not yield perfectly separable predictions. Yet, they are allowed to coexist, because they each provide a useful lens on the phenomenon that they were designed to explain.

Ready to continue? Moving on to sin #3


7Sins: #1 Narrow scope

Editor’s note: Today we start our series on the seven sins of consumer psychology from the presidential address of professor Michel Tuan Pham at the recent conference of the Society for Consumer Psychology. Read the introduction here.

One of the most crippling aspects of our research comes from the limited scope of what we choose to study. We collectively identify our field as the study of “consumer behavior.” I suspect that most of us would agree with the following definition of what consumer behavior is:

The set processes by which consumers come to learn about, desire, acquire, use, and dispose of goods, services, and activities available in the marketplace to satisfy their needs.

scope of consumer behaviour

Pictorially, the scope of what we call consumer behavior looks like this: A series of stages that progress from the activation of a desire for some need-fulfilling marketplace offering, followed by processes linked to its acquisition, followed by an actual usage and consumption, and ending with the disposal or divestment of the marketplace offering.

If you look at what we study as consumer psychologists, you will find that the bulk of our research is dedicated to activities that are linked to purchasing behavior—things such as search, consideration sets, choice, persuasion, willingness to pay, etc.—as opposed to consumption behavior as a whole. In this respect, our field is more about buying behavior in particular than about consumption behavior in general. This issue not new, in 1982, Jag Sheth already noted that we need to go beyond consumer decision making and study nondecision-making aspect of consumer behavior. In fact, in the early days, the field was called “buyer behavior” rather than “consumer behavior” (Alderson, 1957; Howard & Sheth, 1969). It is only subsequently that we expanded the field’s boundaries to what they are today.

As the figure illustrates, buying behavior is only a subset of all consumption-related activities. In fact, it is a subset of the activities related to acquisition. We should not forget that important forms of acquisition are not purchase related including borrowing, product sharing, gift reception, and yes, even stealing. Except for gift-giving, very little research examines these other forms of acquisition, even though they have very large effects on business and the overall economy. For example, according to the National Association for Shoplifting Prevention, $13 billion dollars of goods are stolen from retailers every year, and one in 11 people in the US is a shoplifter.

So, why do we still focus primarily on purchasing behavior? One reason is historical. Another is a widespread belief that purchasing behavior is somehow more relevant from a managerial standpoint. Although there is truth and logic to this belief, it is somewhat misconceived. Businesses are not just interested in what makes consumers buy their products, they are also very interested in what makes consumers want (or not want) these products in the first place. Why do consumers want to renovate their kitchen? Why and when do consumers want to replace their car? Why are consumers interested in cruises as a form of vacation? What this means is that understanding consumers’ needs and desires is important in its own right. This is in sharp contrast with the way we typically frame our research questions, where we generally assume that consumers’ needs and desires are exogenous (e.g., “Assuming that you need to go on a vacation, which resort would you choose?”).

Once you recognize that consumers’ needs and desired are important in their own right, you realize that many important and fascinating questions remained to be answered. For example, when and how can fictitious needs be engineered, as the De Beers Company did with diamonds in the second half of the 20th century?  How can certain perceived needs be suppressed, such as the need to own a gun or the need to text while driving? How can under-recognized needs be activated, such as the need for safe-sex practices and hygienic food preparation?  These are questions that are theoretically rich and have genuine business and policy relevance.

Similarly, businesses are also very interested in knowing more about how products and services are actually consumed. Some of the most important consumer insights one can obtain for product innovation, improvement, and marketing is from observing, analyzing, and understanding actual usage and consumption behavior. The original idea for introducing Starbucks as a socially acceptable place where people can just hang while drinking a 4-dollar latte, came from a trip that Howard Shultz took in Italy where he got a chance to observe how Italians frequent local coffee bars. Similarly, the enormous success of Febreeze, now $1 billion brand of air freshener, was originally driven by insight gained from observing the cleaning habits of consumers in their homes. One of the most interesting insights that I gained about consumer behavior came from the one of the projects in my strategic consumer insight class. The project was for a pharmaceutical company interested in understanding why sleep-deprived consumers in western economies—and that’s about 25 percent of the population—often do not resort to sleeping aids. One of the major findings from that project was that a primary reason for this lack of consumption comes from the fact that for most consumers, the process of going to sleep is strongly ritualized. And sleeping aids do not fit into these rituals. Therefore, we clearly need to devote more attention to usage and actual consumption aspects of consumer behavior. We are beginning to see greater interest in consumption experience (Schmitt, 1999; Brakus, Schmitt, & Zarantonello, 2009) and consumption utility (Janiszewski 2009). Other important topics include pre-consumption activities (e.g., preparation, self-customization), shared consumption, consumption rituals, and product possession behavior.

Finally, we should not forget that there is also important knowledge to be gained from the disposal and divestment stage of consumer behavior. Disposal behavior, such discarding and recycling, has enormous impact on the environment; donation and reselling behavior greatly affects the economy and social welfare see Craigslist and eBay success; product divestment is a major determinant of the replacement of consumer durables; and compulsive hoarding behavior is a serious issues, especially among the elderly.

Want to read on? Sin #2 here….

The Seven Sins of Consumer Psychology

Editor’s note: This week we’re doing something a little bit different. At the recent conference of the Society for Consumer Psychology, the presidential address of professor Michel Tuan Pham at Columbia University  really resonated with our team, so we asked him if we could publish his talk in its entirely because we felt its message should be heard much wider in the decision making science community than just those who were lucky enough to be present in San Antonio, TexasToday we publish the introduction to the talk, and from tomorrow we will publish one sin a day. Over to Michel… 

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Research Heroes: Peter Ayton

This week we’re featuring a Research Hero from the other side oP_AYTONf the Atlantic and moving over to the UK with professor Peter Ayton from City University London. After receiving his PhD from University College London, he joined City University faculty in 1992. He has also been a visiting Professor at the Anderson School of Business UCLA, Princeton and Carnegie-Mellon universities in the USA, as well as the Max Planck Institute in Berlin. His research tests the psychological theories of judgment and the mental strategies adopted for judging and deciding. He has also investigated issues in areas of human activity as diverse as legal, medical and transport judgement, and individual’s decisions about their personal well-being. His published books include ‘Subjective Probability’ and ‘Judgemental Forecasting’.

I wish someone had told me at the beginning of my career… that writing is a lot easier if you talk to someone – as many people as will listen – about what you are trying to write about before trying to put anything down. Writing is talking written down – but harder because, in the absence of the listener/reader it’s not so easy to see if your point is interesting or even getting across. And try and write all the time: somehow I often discover what I have to say in the actual process of writing – or talking.

For me research is a very social process. I know some people worry about having their ideas stolen, which I can’t help but feel is a mistake.  I’m very fond of computer pioneer Howard Aiken’s remark: “Don’t worry about people stealing your ideas; if your ideas are any good, you’ll have to ram them down people’s throats”.

I most admire academically… The first paper I read as a PhD student was Features of Similarity by Amos Tversky. Its brilliance, inventiveness and style – the final sentence left me in awe – had a huge impact on me. The feelings it inspired were like those from listening to fantastic music – not quite as intense as the first time I heard “I am the walrus” – but up there. I read more – of course the classic work with Kahneman – also the collaborations with others and became a fan. On the BBC’s long running radio show “Desert Island Discs” you have to imagine you are cast away with only 8 records for company.  If ever I’m a castaway on “Desert Island Psychology Papers” Tversky’s work will come with me.

The best research project I have worked on during my career… I really enjoy collaborative research and have been fortunate enough to have worked with lots of different people [curious how most academic papers – even those not necessitating a technical “team” – have more than one author – while almost all literary work is single authored]. Of course negotiating a consensual view with others is sometimes a challenge – but maybe that makes it better. For me they are each uniquely infused with the personalities of the people I worked with but it’s rather futile trying to pick out one as exceptional to the others.

The worst research project I have worked on during my career…  It’s hardly for me to deny that I have worked on some fairly uninspiring projects but I can’t think of one I regret undertaking. Many led nowhere but that is the nature of research I think.

The most amazing or memorable experience when I was doing 

Graham Greene letter

research… The Hollywood film biopic of my research career would be an excellent cure for insomnia – but there have been one or two episodes that stand out for me. One highlight was receiving a letter from the author Graham Greene. I had sent him a slightly whimsical piece I had written about what I fancied was a probability fallacy in his book “Dr Fischer of Geneva or The Bomb Party” – and he replied! His reply was hardly an epic literary text but it thrilled me to bits.

The one story I always wanted to tell but never had a chance… I spend a lot of time telling – usually re-telling – stories so I can hardly say I never had the chance. I have squirreled away a modest collection of poignant events with decision researchers that I ought to place on record at some point – like the time when I spilled a terrifyingly expensive glass of wine when out to dinner with Dick Thaler (around the time he wasn’t working on the mental accounting of wine consumption); the time I capsized in a canoe on the rapids with George Loewenstein and the time when, engrossed in a long conversation with Karl Halvor Teigen, I noticed a spider busily spinning a web connecting our noses. 

A research project I wish I had done… Foolishly I don’t eschew research projects that interest me – I am usually hopelessly over-stretched because I find it impossible to resist the temptation to investigate whatever looks worth a look. Consequently there are lots of “pending” projects I wish I had finished – but maybe they’ll emerge one day. Some of my papers were well over 10 years in the making… 

If I wasn’t doing this, I would be… a very different, less fulfilled person. An enormous of my mental life is informed by contemplating JDM concepts. It more than makes up for the disappointment of not becoming a professional footballer.

The biggest challenge for our field in the next 10 years… I could be wrong – I suspect throughout history many felt they lived at a critical juncture – but the phenomenal attention given to our field is a fantastic development that needs to be sustained and progressed.  At the risk of sounding like an old codger I do remember when the subject was a bit of a backwater. It has been growing throughout my lifetime but in the 10 years since Kahneman’s Nobel an array of popular books and the internet have made judgment & decision-making research (OK – “behavioral economics” to those who fear “psychology” turns off economists and their audience) a very hot topic among the chattering – and even the ruling – classes. Can we sustain this attention and claim a permanent and prominent role in determining public policy? I worry that recent research scandals will jeopardize progress, or that it will suffer from some sort of backlash when people find out we don’t know everything, but the potential for a real sea change looks enormous.

My advice for young researchers at the start of their career is… At the  start of my PhD, I recall receiving lots of general advice from well-intentioned people and wondering how to implement it – e.g.: “Take risks”; “Focus on one clear question”. Both sound plausible but quite how do you do that – how do you even know if you are doing it?

Moreover, given what I now understand about psychology, I doubt I should trust my now-self to reliably recall my then-self and then validly diagnose what would have helped me. Are there indeed any gobbets of sagacious advice that would have made life easier? Surely, if there were real pearls of wisdom wouldn’t they be common knowledge?

I tell my students not to stress if things appear to be going badly – in fact I tell them I would be worried if they always told me things were going well. Research entails doing things you haven’t done before and if you haven’t done something before you often don’t do it that well; if things are going well maybe they aren’t really doing research at all… All those papers with calm rational accounts of elegant progress through an investigation don’t typically mention all the blind alleys, false dawns and stymied impasses that were suffered on the way. 

Departmental website | Website

Viewpoint: Are you spending your research time wisely?

Editor’s note: In this post, Troy goes beyond the surface to see if professors really have as few regrets as they claim, whether all research is equally valuable and how young researchers should spend their time. These important issues will also be explored in our week-long special “The 7 sins of consumer psychology”, starting on 7th April with each day uncovering a new sin. Stay tuned!


After many mentor lunches, doctoral consortiums  and interviewing professors for this blog, I have come across a common theme: many professors actually regret a lot.

Though the “Research Heroes” series on this blog has been full of interviews of professors saying more or less “I regret nothing,” this sentiment is not shared by many in our field. Since, it is unlikely that even 2% of the people reading this post will be as successful as the Research Heroes we have previously interviewed, it may be useful for us to listen to what other professors are saying (many who are also very successful).

So why do so many professors regret how they spent their time?  It comes down to one phrase: All research is valuable, but some research is more valuable. Many professors regret working on projects that had little impact theoretically or substantively, but were safe publications. Today those publications have few cites and no practitioner has ever lifted an eyebrow at the findings.

For anonymity’s sake I will not reference the specific projects professors deemed as their “unimportant projects” but the projects they mentioned shared a number of qualities. These qualities are: 1) the findings were idiosyncratic to a domain, 2) it was difficult or pointless to apply the findings in a practical way, and 3) the findings neither answered nor stimulated any interesting questions. Oddly enough, these weaknesses could have been identified before starting the project.

Literature, parents, and religion have taught us to spend our limited time on Earth wisely. And though we may apply this wisdom to how we live our lives, we are not always good at applying it to how we do research, often chasing an idea because we think “it will work” rather than thinking, “does it matter if it works.”

Maybe try this test next time you have an idea. First tell a decision researcher and see if they think is theoretically interesting and distinct. Second, go tell a friend, significant other, or parent about your idea and see if they think it is interesting. If they don’t, you may want to reconsider the idea.

In The Wild: Daniel Egan

team_dan_bio bettermentNext in our series of practitioners is Daniel Egan, Director of Behavioral Finance and Investing at Betterment.com. Prior to joining Betterment he was the Behavioral Finance Specialist for Barclays Americas, and a founding member of the Barclays BeFi team in 2007. He earned his Master of Sciences in Decision Science from the London School of Economics and Political Science and his B.A. (Distinction) in Economics from Boston University, and has authored multiple publications related to behavioral economics as well as lecturing at New York University, London Business School, University College of London, and the London School of Economics. Betterment is an online financial adviser and investment manager which uses brilliant technology to ensure clients identify and achieve their financial goals. They use behavioral finance to ensure optimal saving, investing and behavior along the journey. As a part of that, Betterment is keen to collaborate with academic researchers in studying and understanding their clients’ behavior and it’s impact on achieving their goals.

Tell me about your work: how does decision making psychology fit in it? It permeates our service. We apply research findings regarding the psychology of saving, risk-taking, and investing and use it to guide how we communicate and display information to our clients. For instance trying to reduce myopic loss aversion when clients are assessing performance, and preventing narrow framing when making forward-looking risky decisions. We think about how defaults, inertia, loss aversion and hyperbolic discounting can be used to help clients make the right decisions, rather than trip them up. We even look at how social interactions and peer comparisons can be used to motivate better behavior.

And it informs how we make decisions internally. For example, when making hiring decisions we don’t let our opinions bias each others. We either agree a set of criteria to make a decision by, and do it algorithmically, or we gather opinions anonymously and independently. That way we have honest and independent feedback. We’re very careful to not let group-think run our meetings.

How did you first become interested in decision making psychology? As early as high school, it was one of the most interesting subjects to me. My father is a clinical psychologist, so since I was young I’ve I loved understanding how I made decisions, for better or worse, at all levels. From the tiny nuts and bolts of neurotransmitters to the very high order functions such as understanding probability weighting, discounting, and the genetic component of risk taking, I like psychology because it’s so applicable to my daily life.

I think I’m very lucky that psychology has grown into other fields which I’m interested in such as economics and finance, as I’ve gotten older. This means there are constantly new findings, the field is growing, and there is more and more to learn and apply.

What type of research do you find most interesting, useful or exciting? Research which shows how you can improve things, with a solid theoretical foundation. In general, I have “bias fatigue” – I know that humans aren’t perfect, and finding another “gotcha” bias is not too interesting, especially when it’s very similar to existing ones.

Diagnosing a problem is only step 1. I think step 2 – finding a solution, and showing why or how it can work, is far more interesting. That there is more and more JDM research aimed at debiasing, or using biases fruitfully, is very exciting. The “nudge” examples are obviously a good example here, and I’d like to see more work done on other ways to help people improve their decision making.

Do you see any challenges to the wider adoption of decision making psychology in your field? If things go well, behavioral finance will grow into a fairly standard role within most financial organizations, especially as data analysis and understanding how minor details can make a big difference becomes more mainstream.  I foresee two challenges to this happening.

The first is that some industry players pay lip-service to psychology and behavioral finance without systematically implementing and testing improvements. The hallmark of this is that the institution employs an “expert” (sometimes who doesn’t have a strong background in psychology), talks about biases and findings, and doesn’t produce any evidence of how they’ve improved client outcomes. In the long run it will appear that psychology in finance is vague promises based on gimmicks and parlor tricks. The lack of empirical and experimental evidence of the benefits of a behavioral and psychological expert is the biggest threat to the field in my opinion. The field must prove its value by not only criticizing, but improving things.

The second challenge (related to the first) is that very few psychology and JDM programs prepare graduates for commercial roles (there some exceptions to this, obviously) . Despite the fact that most companies would love to have someone tell them how to improve client satisfaction and client outcomes, and that these jobs give you the ability to actually improve things in the real world, few academic institutions encourage and equip psychology graduates for the commercial world. From companies’ point of view, this means there are few qualified individuals to trust to run experiments and keep both the company and the clients interests at heart.

How do you see the relationship between academic researchers and practitioners? Underdeveloped, but improving slowly.

There are tremendous gains to be had by academics and the commercial world working together. Companies have access to representative and relevant samples which it is sometimes impossible for researchers to access. They have more money to and resources to throw at solving specific defined problems. And they want to advertise how they help their clients. But the often don’t have the theoretic, statistical, or experimental knowledge to originate and execute a solution to these problems. They don’t know how to prove that they’re doing the right thing. Those are the skills a more academic background brings which are lacking.

Far too often we dwell on the zero-sum games and incentives of businesses – not wanting to use our knowledge to redistribute wealth from clients to businesses. In my experience, it’s a minority of commercial enterprises who want this – it’s a very short-term way to make money. Most often, they want to be the leader in their field, and show that they’re better than the competition. Focusing on exactly the projects which make the clients better off is a win-win.

What advice would you give to young researchers who might be interested in a career in your field? I’m very conscious, after writing out this list, it’s probably the things which people dread the most, but it’s honest.

  • Take chances and network hard: Probably the most important – ask to meet and speak with people. Pursue an internship with a company you really like, admire, or think you could help improve. Talk to people about their products. Write into companies suggesting (very specifically) how they could improve things. Remember that if your odds are 1 in 20, you only need to do about 40 such meeting before you’re extremely likely to find a great role somewhere. 
  • Get comfortable with economics & finance – Think about a company whose product, or even better, service you love. How and why do they get paid? What’s their cost structure? How could they offer a better service, and would you pay more for it? Get inside their head, and internalize their mission – that way you can think of ways to help. You can learn about the most important ideas in these subjects quickly, and they’ll be useful to you not just in work, but also your personal life. 
  • Get comfortable with lots of statistical methods (not just experimental and survey design). You don’t need prove the central limit theorem – rather, you need to know when to use logistic regression versus linear, what statistical test to use etc. Be broad rather than narrow, have a good toolkit. Check out Regression Modelling Strategies by Frank Harrell – my bible on the topic.
  • Get comfortable with programming. This is probably the one you least want to hear, but which has been most important to me. Being able to do analysis quickly, and effectively requires knowing the tools. No, Excel is not good enough. I highly recommend R for practical reasons. It is free, so you never have to convince someone to buy you a license. Many people use and contribute to it, which means it is well documented and supported. Getting good at data management and analysis in R is an investment – it requires some sacrifice up front, but will pay off high dividends later. Also, programming forces you to think in a very exact and clear manner, which is useful unto itself.

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