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Posts Tagged ‘Decision Making’

Marketing and consumer researchers have long been interested in revealing and describing differences in the behaviour of consumers that arise from differences in culture between societies, nations and communities. Ignoring such differences can lead companies to making embarrassing and costly mistakes in international marketing. Culture sets ideas, values, norms, symbols and customs that influence and shape the thoughts, beliefs and actions of the people adhering to it; in particular, responses to marketing-oriented stimuli — products, advertising messages, websites, stores etc. — can vary specifically due to cross-cultural differences.

Kastanakis and Voyer (2014 [1]) propose that investigation of the effects of cross-cultural differences on consumer behaviour should look deeper into pre-behavioural processes, namely perception and cognition. Culture conditions perception and cognition, thus affecting how consumers perceive and understand stimuli, which consequently drive behaviour. Consumers develop perceptions and thoughts from the input of stimuli they attend to, but top-down processes set by pre-defined mind-sets, goals and beliefs (e.g., guided by culture) may inversely shape how consumers perceive, interpret and think of the information received from their environment. The researchers review ways in which culture influences perception and cognition in different functions or contexts. Similar to the greater part of research on cross-cultural differences, Kastanakis and Voyer concentrate on differences between Western cultures (individualist, espousing independence) and Eastern [Asian] cultures (collectivist, espousing interdependence).

Western cultures encourage people to see themselves by themselves, that is, developing an independent construal of one’s self-image; Eastern cultures on the other hand encourage people to see themselves as part of a group, that is, developing an interdependent self-construal. Thus, Easterners are predisposed to construe their self-image based on their relations with and similarities to others in a group of affiliation, compared with Westerners who view themselves as individuals independent from others, emphasising their unique traits. The tendency of Easterners to perceive and judge an individual person relative to surrounding others is demonstrated in this example cited by Kastanakis and Voyer: American and Japanese research participants were asked to judge the emotion of a central figure based on his or her facial expression when surrounded by other person figures showing the same or different expressions — “The findings indicate that the surrounding people’s emotions influenced Japanese perceptions but not Americans’ perceptions of the central person’s feelings.” [Based on research by Masuda, Ellsworth and others, 2008.] Contextual information (e.g., feelings of others) seems to matter for judgements in the East more than in the West.

In another implication of the independent-interdependent cleavage, whereas Westerners are mainly focused on achieving their personal goals, Easterners are looking more to help advance goals of the group they belong to, catering to others’ needs or wishes.  The authors suggest as a possible consequence that “Westerners perhaps tend to join groups to serve their own needs, whereas in collectivist societies, people serve the groups to which they belong”. This difference in approach may affect, for example, the way users of social media in North America and Europe participate and interact in these networks, differently from users in Asia (e.g., South Korea, Japan, China). It has been repeatedly argued that social media networks have not helped people in the West to socialise any better, perhaps even to the opposite, and that users engaged in social media may still feel in solitary. A similar discussion may concern also the use of digital platforms in the rising ‘sharing economy’ (e.g., Airbnb, Uber, LendingClub). Gaining true benefits from socialising and sharing platforms is based on collaboration, contributing to others or at least reciprocating helpful actions by others, not quite in line with values and norms taught by the individualist culture of the West (e.g., promoting competition and personal achievement).

The contrast between independence and interdependence further finds an expression in a respective distinction between thinking styles: analytic vs. holistic. Analytic thinking, associated with an individualist culture, is more focused on single objects and the attributes of each; holistic thinking, associated with a collectivist culture, is more attentive to the context or field in which any object is found. Thereby, Westerners following an analytic perspective would be more inclined to observe and judge objects in isolation, whereas Easterners (Asians) following a holistic perspective tend to consider the relations between objects observed and make judgements based on the context of a whole scene. This distinction can have important implications for the perception and evaluation of visual scenes. For instance, a Westerner would focus on a particular exhibit or display of products in a store (e.g., a dressed mannequin) while an Easterner would see the same display against the background of other in-store displays and interior decorations of the store. In front of a shelf display, an Easterner viewing it holistically would be more attentive to the collection of products on display compared with an ‘analytic’ Westerner focusing on each product at a time (note: such a difference may also be applicable to a screen display of products on a webpage).

The difference in perspective is applicable also in viewing photographs of scenes, not just when being physically present on-site. Easterners more accustomed to a holistic view would be more capable at capturing the gist of a photographed scene as it relies on perceiving relations between multiple figures and objects in the scene. Westerners following an analytic perspective, on the other hand, would be more capable at noticing the attributes of particular objects. It should be noted, therefore, that while people in the collectivist East may have the advantage of identifying relations better, people in the individualist West may have the advantage of observing object details better (i.e., could be judging single objects with greater scrutiny). It furthermore appears that people match their aesthetic preferences to their culture-orientated perspective. Kastanakis and Voyer give an example wherein Eastern portrait paintings or photographs “tend to diminish both the size and the salience of the central figure and emphasize the field”.  Such differences in perspective and thinking style should be considered, as the authors advise, in the aesthetic design of advertising materials and other communications as well as in retail sites.

Stronger relational processing has relevance to attributes, and moreover to a perceived relationship between price and physical product attributes used as intrinsic cues for quality. Lalwani and Shavitt (2013) provided ground support for the association between modes of self-construal — independent vs. interdependent — and reliance on a perceived price-quality relationship. The way people look upon their own self-concept vis-à-vis their relation to others radiates to their perceptions and processing of relations between price and quality attributes. Importantly, however, they show that the linkage is mediated by the distinction between analytic and holistic thinking styles. Interdependent (collectivist-oriented) consumers are more capable at processing price-quality relations, where holistic thinking in particular positively predicts greater reliance on such relationships [2].

In addition to visual processing and aesthetics, culture is known to affect perception, processing and preferences of smell and sound. Consumers may be biased to better recognise smells familiar to them in their culture or to better comprehend culturally familiar melodies. The bias occurs, as said by Kastanakis and Voyer, during recall and recognition before the information even enters the attitude formation, judgement, and decision making processes. Consider thereby the mixtures of styles and forms one would find in a country that absorbs immigrants originating from cultures different from each other or from the culture incumbent in the receiving country, for example in music and food. As people borrow from the traditions of communities of other cultural origins and adopt also from those typical locally, they get exposed to and experience mixtures of music melodies or food flavours. Yet, even with years passing certain things do not change — consumers may continue to feel more secure and comfortable with the familiar music genres and food styles they were raised on at home, associated with a given culture.

  • Kastankis and Voyer note a lack in cross-cultural research on taste perceptions; that is unfortunate because food is such a significant domain, but the smell of food may still have a cultural impact on consumers’ reactions.

Furthermore, the language one speaks can determine the perspective, individualist or collectivist, one applies. Immigrants, for instance, may change how they present themselves depending on the language they use: that of their origin or the one adopted in their current country of residence. The language carries the values and norms of a culture it is associated with, such as how people perceive themselves. For example, bi-cultural Chinese-born people refer to their own internal traits and attributes to describe themselves in English but describe themselves in relation to others when using Chinese. Kastanakis and Voyer argue that language is not emphasised enough as an aspect of culture: “language triggers a culture-bound representation of the self”.


Idiocentrism and Allocentrism are views held by people at the individual level in parallel to the individualist and collectivist cultural views of societies, respectively. This reference to individual-level culturally oriented views becomes particularly prominent when the personal view does not match the societal-level view dominant in one’s country of residence: for example, when people of Asian origin living in the United States, a country with an individualist culture, personally maintain an allocentric view.

Dutta-Bergman and Wells (2003) found some interesting differences in values held and lifestyles practised by idiocentrics and allocentrics living in the American individualist culture. For example, idiocentrics are likely to be more satisfied with their financial situation and optimistic than allocentrics; idiocentrics are also more disposed to be workaholic, yet are more innovative. Allocentrics are more likely to be health conscious; additionally, they are more inclined to invest in food preparation and other chores at home and to engage in group socialising than idiocentrics [3]. (Note: Idiocentrism and Allocentrism are approached as individual-level dispositions adopted by people; they are not necessarily contingent on any immigration status or country-of-origin.)


 

The differences between individualist and collectivist cultures may influence human cognition in several more ways explained by Kastanakis and Voyer. Key areas involve self- versus others-related cognitions, self-esteem, and information processing. Briefly mentioning some noteworthy implications: (1) People in Western cultures have a stronger tendency to make dispositional attributions for behaviour (e.g., to one’s personal traits or competencies) and discard situational factors, as opposed to Easterners; (2) Causal reasoning in Eastern cultures tends to give greater consideration to interactions between personal (dispositional) factors and situational or contextual factors than in Western cultures; (3) In Western cultures people will prefer to classify products based on typical functional or physical attributes of categories (i.e., rule-based classification) whereas in Eastern cultures people will rely more on family resemblance and relationships between products (i.e., relational classification); (4) In persuasion, Westerners (e.g., Americans) prefer to take side in conflicts while Easterners (e.g., Chinese) are persuaded more by compromise solutions and are more ready to deal with contradictions.

Readers are reminded additionally of the differences in processing of visual information already described earlier (i.e., between the Western object-focused analytic approach and the context-orientated holistic approach in the East). These differences may be well-connected with the approach consumers take in judging and classifying products visually displayed (e.g., physically in-store, virtually in print or screen images).

Three final comments to conclude: First, as always we have to be careful with generalisations made such as between ‘Western culture’ and ‘Eastern culture’. There are differences in elements of culture between countries associated more closely with either the individualist or collectivist streams of culture. There is furthermore variation among communities and sectors within countries, and some tendencies may also be considered as individual-level differences (e.g., holistic vs. analytic thinking). Second, there is need in the West to explore and deepen the understanding of other streams of culture (e.g., African, Middle Eastern, South American). Third, Kastankis and Voyer address changes in perspective and behaviour of people in Asian nations caused by their growing exposure to the Western individualist cultural orientation. However, a more salient phenomenon prevalent in recent decades seems to be the immigration of people originating from non-Western cultures coming to live in countries of the West. Especially in Europe, the extent of exchange in ideas, values and customs between people with Western-orientation (‘incumbents’) and non-Western cultural orientations (e.g., from Africa and the Middle East) should have great impact on the balance between cultures on the continent (as well as in the UK), and not least the kind of consumer culture that will prevail in future.

International marketers must keep fully aware of and account for the differences between Western individualist orientation and Eastern collectivist orientation, and more so their multiple facets of manifestation in perception and cognition. Particularly important is paying attention to the differing thinking styles (i.e., analytic vs. holistic thinking) for their possible implications in processing and responding, for example, to persuasive attempts in advertising in online and offline channels, store design and visual merchandising. Extending marketing plans or initiatives across seas and borders, without making consideration for these potential differences, may significantly diminish the effectiveness of the actions taken in new destination markets to the extent of proving utterly precarious.

Ron Ventura, Ph.D. (Marketing)

References:

[1] The Effect of Culture on Perception and Cognition: A Conceptual Framework; Minas N. Kastanakis and Benjamin G. Voyer, 2014; Journal of Business Research, 67 (4), pp. 425-433. (Accepted version is available at eprints.lse.ac.uk/50048/ on LSE Research Online website).

[2] You Get What You Pay For? Self-Construal Influences Price-Quality Judgments; Ashok K. Lalwani and Sharon Shavitt, 2013; Journal of Consumer Research, 40 (August), pp. 255-267 (DOI: 10.1086/670034).

[3] The Values and Lifestyles of Idiocentrics and Allocentrics in an Individualist Culture: A Descriptive Approach; Mohan J. Dutta-Bergman and William D. Wells, 2002; Journal of Consumer Psychology, 12 (3), pp. 231-242.

 

 

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Choosing reading books can be a serious undertaking. Even the choice of a novel or a detective book may not be taken lightly by readers. There are different ways in which consumers may get into choosing a book; some search and selection patterns in the decision process carried out by consumers can be observed in bookstores. It is possible to infer from observations, with some limitations, styles of shopping for books, involving certain tactics or rules utilised in the process. Book fairs especially offer an interesting and vibrant venue for book shopping with options not regularly available at stores. Such events may also provide an opportunity to detect new or distinctive patterns and styles of shopping that arise from the dynamic happening and busy environment.

The open-air Hebrew Book Fair has been taking place in a main central square in Tel-Aviv for over forty years in every June. Originally the book fair was held for a week but in recent years it has been extended by three more days due to its high popularity. It must immediately be noted that the book fair is an event reserved for publishers. It is a kind of ‘direct-sales’ event in which publishers meet face-to-face with readers to present their book collections to them for purchase on special discounts (the main bookstore chains run their own parallel competitive events with discounts in-store or near their stores). Visitors at the book fair can find Hebrew-native books and books translated to Hebrew from English and other languages; topical categories cover, for instance, prose, poetry  and novels; detective and thrillers; history, science, and other areas of knowledge; and last but not least children & youth books. Such an enormous selection of books is not available ordinarily at bookstores in the country. The larger publishing houses may occupy ten or more counters in-line.

The visitor traffic at the event, as in this year, suggests that print books are still highly desired by people. Nevertheless, to attract even more visitors, particularly families with children, the organisers added in the past few years food and drink stands and a sitting area with tables in the square’s centre. It may help to increase the convenience to visitors and festivity of the event though it could sacrifice a bit the respectability of this literary event. However, it may be a matter of necessity or priority to make the event more popular and vibrant so as to bring larger reader audiences back to books.

As suggested above, this book fair is a busy event with tens of thousands of books of numerous titles on display from different publishers and across a wide range of topics. It retains also a long tradition wherein Israeli authors attend to sign their books for visitors-buyers. Some book counters may become crowded with shoppers during certain hours through the afternoon and evening (i.e., after work and school hours) which can make it harder to access books and check them out more deeply. Hence it may require shoppers to apply tactics for choosing books of their interest and taste a little differently than they would while shopping in a bookstore. Yet visitors find their ways to browse books, sometimes more loosely, sometimes more meticulously; it seems to happen overall in an orderly manner, each visitor getting his or her place at a book counter or desk.

Visitors can be seen walking along counters of a given publisher, staying at a counter for a while to observe its books, then moving along. After selecting a few books from separate but adjacent counters of the same publisher, the visitor often returns to a previous counter to pay. However, visitors-buyers are also offered the option to keep books already selected behind the counter (a combination of convenience and security for both sellers and customers).

Three forms of browsing candidate books of interest can be primarily noticed: Firstly, eye-scanning the front covers of books from top. Secondly, lifting a book, turning it over and reading its back cover — an abstract, short review recommendations, or a brief biography of the author(s). A visitor may examine a few books from a counter this way, but being able to do so comfortably may truly depend on how many people are already at the counter. Hence, visitors who cannot find a free spot at a counter are often seen looking over a counter-top quickly, moving to the next counter, then coming back if perhaps there was a book that had caught their attention previously to check on the book more closely. But visitors generally do not have to wait too long to find a free spot at a counter. Thirdly, one gets to open a book and sample-read sections from its pages, or looking at photographs, charts or maps inside the book. Instances of reading inside books were observed much less frequently.

Examining a book’s content more deeply to form a better founded impression or opinion of it is more difficult and hence is less likely than would be seen at bookstores. Yet, if time and space at the counter allow, it is possible to find a visitor examining a book more meticulously. It appears to be particularly relevant and appropriate for ‘knowledge books’ such as in history, sciences and technology, the social sciences, economics and business. For example, a visitor in his ~70s was leaning over an open book on the history of WW2 by Max Hastings, appearing concentrated in reading and observing maps and photographs (‘Inferno/All Hell Let Loose’, translated). He seemed interested overall in history of the two world wars of the 20th century, judging from other books he browsed; after nearly ten minutes he handed three chosen books to keep, and continued searching [A].

  • Please be advised that the age estimates of visitors are based on observation alone in best judgement of the author.

Comparing books on a given topic can be an even more difficult task to perform at a counter. It is hardly practical to hold two books open simultaneously for comparison, but visitors may examine books sequentially in attempt to evaluate and choose which one is more suitable to their objectives. For instance, a visitor (male, ~60) looked into a book — its introduction, inner pages, and content — on the history of the state of Israel (by Michael Bar-Zohar), but he apparently did not find what he was looking for as he asked the seller if there were books on the period preceding the establishment of the state. The seller brought him two books (concerning the Arab-Israeli conflict): he opened one of them, went through its pages, and put it aside, then browsed at greater length pages in the other book and looked at photographs. Eventually he chose the first book on the state of Israel, after looking into it again, and the third book (total time 15 minutes, [B]).

The search and examination of books sometimes involves moments of deliberation. In some cases, as above [B], the visitor may ask for advice from a seller. Alternately, as in another case observed, a seller who noticed a visitor (female, 30-35) hesitating, offered her help with recommendations. The visitor-shopper was already holding two books and the seller brought her more books the latter thought may suit the shopper accordingly in prose or novels by Israeli authors. They continued talking about the books as the shopper browsed loosely inside some of the books or read from the back cover [C].

Deliberation can take some additional forms. For example, a female visitor (~45) was considering the purchase of a book on equity investments. She was checking in particular a book purporting to be adapted and designated for women. The visitor went through some book pages, being unsure it was a good choice, and seemed recoiled upon noticing the book was from 2011 (i.e., ‘Is it still valid and relevant?’). But eventually, following a short exchange with the (female) seller, the visitor-shopper decided to take it anyway [D]. A visitor (male, 25-30) at another publisher has shown an intriguing shopping process with deliberation to the last moment: He was already holding a book when moving to another counter to look over books of prose, selected one of them, then browsed some science and knowledge books (e.g., by an Israeli scholar, lecturer and prolific writer on sciences and philosophy, Haim Shapira), but collected none. Subsequently the shopper moved to a more remote counter where he picked-up instantly a book, came back to the previous counter of science and knowledge books to purchase three books. However, after he had already paid and the books were put in a bag by the seller and handed over to him, he took out one of the books and picked-up instead a different book in front of him on biblical philosophy (by Shapira, 10 minutes, [E]).

Shopping patterns can range from exploratory, looking for opportunities with little idea pre-conceived in mind, to being pre-minded, that is, having a goal to find a particular book. Moreover, visitors-shoppers may mix styles at different levels of search, examination and choice while shopping from the same publishing house. Mixed tactics could be seen above in the shopping of visitors [E] and [C]. Following are two more examples of this kind: (1) A young visitor (female, ~17-18) was browsing prose or fiction books, going through pages and reading inside some of the books or reading from the back covers of others, then passed to looking from top at books in adjacent counters of the publisher (a more haphazard quick scan), finally returning to the first counter to buy [F]; (2) A visitor (male, ~45, at a counter of books on history and politics) took a cursory look over a biography of one of Israel’s prominent leaders of the past, kept searching and shortly after found a book on the history of Sephardic Jews (‘Marranos’, Yirmiyahu Yovel) and looked into the book more dedicately; the visitor, who seemed overall interested in Israeli and Jewish history, picked up a book at the last moment by an Israeli historian on the commanders of the Nazi concentration camps (‘Soldiers of Evil’) and purchased it with the book on Marranos [G].

  • In a curious brief episode, demonstrating an apparent pre-determined choice of book, a visitor in his mid-40s approached a counter, stood pausing or looking over the books, then instantly extended his hand to pick-up three copies of a book on the Bitcoin, which he purchased; one of the sellers seemed so impressed that she asked to take a photo of him holding the books with her mobile phone to which he smilingly agreed [H].

The main publishing houses presenting at the book fair offered deals of ‘3 for 100’, that is, three books for 100 shekels (~$28 in June). One publisher even offered five books for 150 shekels. These deal offers were displayed on signage boards above counters. A fourth book could be purchased for 50% of its list price, but this offer was not displayed. Visitors-shoppers who had already selected three books enquired whether there would be a discount for additional books, and were replied with the 50% offer. For instance, visitor [A] so enquired before continuing his search. Another visitor (male, ~30) who was holding four books by Ken Follett seemed unable to make up his mind which three to buy, posed the question about a fourth book discount, deliberated a little longer while shuffling the books in his hand, and finally passed all four to the seller to purchase [I]. In some cases, however, it was the seller who initiated the offer of discount on a fourth book in hope to increase the sale. Visitor [C], for example, accepted an offer as such and bought four books, probably in appreciation of, and perhaps feeling obliged to reciprocate, the advice she received from the seller. Conversely, another visitor (~30), who selected three books in history and politics on his own refused the offer by the seller when submitting his books to purchase [J].

Visitors were induced by these deals to buy more books from any single publisher. A single book could usually be bought with a 20% discount but this offer was not made public, proposed by a seller only on request of the visitor. This policy makes it simply unworthy economically for visitors to cherry-pick the books they most require or desire from different publishers (consider that many of the books cost 80-120 shekels each!). The greater problem, however, is that it may drive consumers to buy books they do not care for or do not have time to read soon. Henceforth, visitors could end up buying a pack of books, collected from several publishers, for the whole year to read. It puts quantity before quality in buying books. The ones standing to suffer from this policy are of course the book retailers who will likely see fewer shoppers at their stores in the coming months. From a publisher’s viewpoint, they may see it as only a reprisal to similar deals offered at bookstores throughout the year.

Visitors-shoppers at the book fair appear to use composite decision strategies for choosing books at the counters of a publisher: a different type of rule or method may be fitted to choose among different books (e.g., picking-up a book planned ahead to purchase, using book titles or author names as memory cues for books they have considered recently, examining inside books with greater scrutiny to evaluate them). Furthermore, the book shoppers are searching for informational cues, starting from the front cover of a book, going to the back cover, then getting inside the book. They could be extending the search for cues about a book as they feel is needed (e.g., cut the search short if sufficient information has been retrieved) or are stimulated to learn more about the book (e.g., intrigued by information on the back cover to look inside).

The difference in shopping for books at the book fair compared with bookstores seems to be not so much in the types of rules or tactics used as in the extent and frequency they are used. Book shoppers may feel at greater ease to search for a book at a store with a print of a book review cut from a newspaper (as observed in a store) than they would in the book fair (surely the same applies if one seeks guidance from his or her smartphone). One may also feel more comfortable and free to browse inside a book at a bookstore, at a quiet corner to stand or perhaps on a couch or sofa to sit and read, than at the book fair. Yet, visitors of the book fair seemed to adapt quite well to the conditions at the counters; they appear to use rules or methods similar to those that can be seen at bookstores, only adjusting them to search and choose more efficiently, particularly by restricting deeper examinations to situations where a book demands it.

  • Additional research methods can aid in identifying and verifying more accurately the book images and information viewed by visitors and the decision rules they use. Those methods include particularly eye-tracking and a real-time protocol of the shopping decision process (‘think aloud’). But executions of such methods may be inconveniently intrusive and interfere with the natural course of the shopping trip for visitors. Another method to consider with less intervention is an interview with a visitor-shopper after concluding a shopping episode.

Gaining greater insight into shopping for books and understanding the decision processes visitors-shoppers follow at a book fair can help in devising new designs of book displays (e.g., better organise books by topics or themes, easier-to-find) and improved practices to accommodate the visitors at the event. The organisers and publishing houses may also come up with a new co-operative scheme that would allow visitors to accomplish more effectively their objective in selecting and buying the books that interest them most or they desire to read.

Ron Ventura, Ph.D. (Marketing)

 

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When evaluating a restaurant, the quality of food is not like other factors considered — it has a special status. The same goes quite as much for other food establishments like coffee-houses. The customers or patrons may trade-off several factors which include the food, service, venue, price and location, yet food quality usually gets a much greater weight than the other attributes, suggesting that the decision process is practically not fully compensatory. The quality of the food, its taste and how much we enjoy it, is a “pre-condition” to dining at a restaurant. However, the balance with other attributes is important; in some cases, failure on those other attributes can be detrimental to the willingness of consumers to return to a restaurant or a coffee-house.

  • Some coffee-houses effectively function as ‘coffee-restaurant’ establishments by serving meals of a variety of food items suitable for every time of day (from eggs, salads and toasts to soups, pasta, hamburger or chicken-breast schnitzel with supplements).

Suppose that Dina and Mark, a fictional couple, are dining at a restaurant and find the dishes served to them being well-prepared and they enjoy very much the food’s taste. However, they are very unhappy with the sluggish service they get and inappropriate answers of the waiter, and feel the atmosphere in the restaurant is not pleasant (e.g., too dark or too noisy). The experience of Dina and Mark can be greatly hampered by factors other than food. How superior should the food be for our diners to be ready to tolerate bad service or a place they do not feel comfortable to be in for an hour or two?

On the other hand, Dina and Mark would likely expect the food (e.g., a dish like ‘risotto ai funghi’ [with mushrooms]) to uphold to a certain gratifying standard (i.e., that the ingredients are genuine, the texture is right, and the dish is overall tasty). If the food is not perceived good enough and diners do not enjoy it, this takes out the point of considering dining at the restaurant altogether. But if the food is good though not so special or great, yet the patrons Dina and Mark feel the staff truly welcome them, treat them warmly and cater to sensitivities they may have, they could still be happy to dine at such a restaurant again, and again. When the food is already satisfactory, additional facets of the experience such as great service and a pleasing ambience can increase substantially the desirability of a restaurant or coffee-house as a place consumers would  like to patronize. We may be looking at a decision process where at first food is a non-compensatory criterion, yet above a certain perceived threshold the balance customers-patrons strike between food and other attributes of their experience becomes more intricate and complex.

Browsing reviews of restaurants that are shared on TripAdvisor’s traveller website can provide helpful clues on how customers-patrons relate to food and additional factors in their appraisals of their experiences at restaurants. Reviews were sampled of Italian and Asian restaurants in Tel-Aviv and London (members-reviewers may be city locals, national and international travellers — examples are quoted anonymously so that reviewers and the specific restaurants they review are not identified by name).

Reviewers most often open by referring to the food they have had at the restaurant; next they may give their assessment of the service they have received, design and atmosphere, price or value, and location of the restaurant. Thus, a review may start by appraising the food as good / great / delicious, and then stating that the service was good / nice / efficient. Nonetheless, it is not uncommon for diners-reviewers to open with an assessment of the service they have received at the restaurant. There seems to be a greater propensity to open the review with service when it is superb, but also on the contrary when it is terrible. Occasionally a review will refer firstly to the atmosphere in the restaurant, which is formed by aspects such as interior design or décor, lighting, music and overall ambience. Atmosphere will appear first or at least early in the review particularly when it is superior or inferior.

Additionally, we can distinguish between reviews that are composed of a few short argument-like statements about the food, service and other attributes, and reviews that tell a story (i.e., a narrative-like review). There are diners-reviewers who go especially into detail of the dishes or items of food they, and possibly their companions, have ordered, and their opinion of the food. Yet reviewers may also describe how they were treated by the serving staff, particularly when they felt exceptionally welcome and cared for or annoyed and undesired. Reviews that have a narrative give a stronger impression of the course of dinner to the reader who can more easily visualize it.

It seems that when diners-reviewers say the food is ‘good‘, they do not throw it out of hand; they do mean that the food is truly good, fresh and tasty. This appraisal should be interpreted as a base threshold for being satisfied with the food. When the food is more than ‘good’, reviewers explicitly express it with adjectives like ‘great’, ‘delicious’, ‘fabulous’ or ‘amazing’. Conversely, descriptions of the food as ‘average’, ‘OK’, and moreover as ‘mediocre’, are certainly not compliments, more likely suggesting the food was barely satisfactory. Unless there was something else especially good about the experience in that restaurant like its service or venue, the reviewer would probably have little motivation to return.  Consider for example a reviewer who said about an Italian restaurant in Tel-Aviv: “The ONLY redeeming factor is, in my opinion, the ambience, which is really cozy and relaxed. Too bad they don’t serve food to match” (capitals in origin, rating: 2 ‘rings’ out of 5). Similarly, a reviewer of an Asian restaurant in London complimented it for its “friendly and attentive” waiting staff, but concluded: “So there were a lot of positives about this place, but I’m afraid the food just wasn’t good quality. It was very bland and boring” (rating: 2 ‘rings’). On the other hand, a review of an Asian restaurant in Tel-Aviv offers the opposite case wherein the reviewer states “AMAZING food, OUTRAGEOUS service” (title, capitals in origin), and ends with the conclusion “basically terrible service which was definitely the opposite of the wonderful tasty food we were served” — the rating for this restaurant experience: also 2 ‘rings’.

  • A prospective diner who looks for a restaurant to try for the first time may find the choice task confusing and daunting when reviews of the same restaurant are quite the opposite of each other in their content. Still, it usually does not take too long to realise the ratio of positive to negative reviews given to a restaurant, in addition to the chart of distribution of ratings it received.

Service appears as the second most important factor after food in a restaurant. Patrons want the waiting staff to be friendly and respectful (this of course is a two-way street), be attentive and not letting them feel forgotten, and to be flexible and kind enough to accommodate their personal sensitivities or preferences (e.g., less spicy, nuts-free, replace polenta with rice as supplement). Less pleasant or efficient service will not necessarily make diners-reviewers reject the restaurant if its food is excellent, but they could drop one grade off its rating (e.g., from 5 to 4). Inversely, when the diners-reviewers are happy with the quality and taste of food, then also meeting a warm and helpful waitress — or sitting in comfort in a beautifully designed venue — can make the whole experience so much better. Reviewers repeatedly emphasise when, on top of their pleasure of the food, they are impressed by a waiter or waitress who smiled to them, was friendly, attentive and helpful, and made them feel at home. A reviewer of an Italian restaurant in London explains why it is her favourite: “Quite simply, the food is absolutely gorgeous. Wonderful ingredients and very well cooked. But most of all the welcome that we received and service that we got from everyone is great” (rating: 5).

A particular aspect of service is the length of time a customer has to wait either to be seated at a table or while dining. Many restaurants take table reservations, but not all do. Not taking reservations is legitimate, but it is far less acceptable and even offensive when staff at a restaurant (including coffee-restaurants) run a waiting list at the doorstep and appear pleased with letting prospect customers gather and wait outside as if to show around how popular their establishment is; if you complain they may even hint at you how much they do not really need your patronage. Such past experience may have made a British reviewer visiting an Italian restaurant in Tel-Aviv be thankful when: “The staff were very pleasant and found us a seat on a very busy afternoon without behaving as if they were doing us an enormous favour”. In a different case, at an Asian restaurant in London, a reviewer commented: “Long wait to be seated, despite the place being half empty, as the servers were running around serving tables but not seating people”. Considerate restaurant proprietors may keep seats reserved for people waiting (e.g., next to the bar), and may even offer them a free drink if waiting is extended.

While at the table, diners dislike when waiters appear to forget them behind or somehow miss sight of them (e.g., waiting for menus, for taking order and bringing courses ordered, for the cheque). A reviewer in Tel-Aviv was critical pointedly of servers who “it seems lost interest”, and started chatting with their colleagues or playing on their phones. Waiting staff are expected to stand by, being ready to answer requests or voluntarily enquire if diners need anything. An American reviewer at another Italian restaurant in the city, coming “late one night”, appreciated that “my waitress made an effort to check on me regularly”. At an Italian restaurant in London, a reviewer noted that on arriving early for a meeting, “I was offered a newspaper to read while I waited which I thought a rather nice touch”; overall, he commended the service whereby “the staff proficiently and effortlessly ensured everyone felt special and were looked after”. Seemingly little touches matter!

In restaurants of fine cuisine it seems justified to wait patiently longer for an order (e.g., 20 minutes for a main course) as it could mean that the dish is freshly prepared with care for you in those very moments from start to finish [an advice received from my father]. In many ‘popular’ or casual restaurants, however, it would be much less the expectation, though it could depend on the type of food and how complicated it is perceived to prepare the dish. Furthermore, the sensitivity of customers-patrons to time spent could be subject to the occasion (e.g., meeting and dining leisurely in the evening vs. a pre-theatre dinner or a lunch break).

Reviews tend not to address directly the time until a dish ordered is served but more generally relate to the waiting time at any stage while being at the table. Some relevant references were traced in reviews of Asian restaurants in London: (a) A reviewer noted that “service can be slow” and “a bit hit and miss” (although the food and atmosphere were good); (b) Waiting for food was raised by a reviewer as an issue for concern: the waitresses seemed “understaffed” and having “stressed looking faces”, with the result that “We sat around with no food or drink for over 20 minutes before we could grab a waitresses’ attention” (the food was “fantastic” and the rating given could otherwise be 5 rather than 4 — the reviewer “would defiantly” return); (c) A reviewer who was overall happy with the friendly and efficient service and “freshly cooked and tasty delicious” food particularly remarked that the “food came quickly”.

The aesthetics of interior design of a restaurant or coffee-house can also have an impact on consumers’ attitude towards the place and on their behaviour. The style, materials, colours, surrounding decorations, furnishing, lighting etc. are instrumental in the way the design helps to create a certain atmosphere and mood (e.g., cold or warm; traditional or top-notch modern; quiet, ‘cool’ or energetic).

John Barnett and Anna Burles of ‘JB/AB Design’, a London-based agency specialising in design of coffee shops, offer six instructive guidelines on the ways design on different levels can contribute to brand experience. They start with creating a happening in the coffee shop (‘The shop is a stage’), followed by using appetizing imagery of food (‘customers eat with their eyes’); being authentic and relevant; persuasive visual merchandising; creative ambience; and giving customers good reasons to come and ‘gather around a table’ in  the coffee shop. Their recommendations sound mostly if not all adaptable to more types of food and drink establishments, including restaurants. In setting an authentic design, they advise to ‘say it like you mean it’ all round the shop : “The whole shop is a canvas for imagery and messaging that forms the basis of a conversation with your customers”.

Reviewers-diners talk less frequently of aspects of interior design and description of the space of the venue; broader references are made to atmosphere or ambience. In the case of an Italian restaurant in the Tel-Aviv area with an elegant modern design, three different reviewers noted it has “a very nice décor”, that it is “very spacious and modern”, and the “interior is beautiful, a lot of air”. A reviewer relating to an Italian restaurant in London wrote: “The décor seems a little dated, but there were some fun touches”. This reviewer also addressed music played in creating a pleasing atmosphere (“alternated nicely between Frank Sinatra and Luciano Pavarotti — perfect!”). A reviewer-diner mentioned earlier, who was impressed by the newspaper gesture, also said of that Italian restaurant: “The ambience was extremely relaxed and the décor is comfortable, plush and smart”. An Asian restaurant in Tel-Aviv was described by a reviewer as “pleasant, with very informal atmosphere, soft background music, and industrial/downtown décor”.

Some appraisals of design and atmosphere sound somewhat more reserved though still positive. For example, a reviewer said of a luxury Asian restaurant in London that it is “very dark inside, but somehow it is also very cooling place”. A reviewer in another luxury Asian restaurant was very impressed by a modern-futuristic design yet felt uncomfortable with it: “The place is playing with your perception, slightly disorienting with its colours and stairs and reflecting surfaces”. The reviewers quoted above were largely very happy with the food as well as the service. In just one case observed, a reviewer of an Asian restaurant in Tel-Aviv became very upset with the food and proclaimed “Sorry! But when we decide to go to the restaurant, we wish to have a good meal, NOT ONLY a trendy design” (capitals in origin, rating: 1). In this case the “rather nice designed place” could not compensate for a poor food experience. Customers-patrons welcome inspiring and modern designs, but the design must also feel pleasing to the eye and comfortable — be creative with designs but not be excessive.

A top priority for restaurants, and to a similar degree also for coffee-houses, remains taking the most care of the quality and taste of the food they serve. However, it is essential to also look after additional factors or facets that shape the customer’s experience such as service, design and atmosphere, price or value. The kind of service customers-patrons experience is especially a potential ‘game-changer’. Additionally, consumers may not be coming to a restaurant or coffee-house for its design but if it looks appealing the design and atmostphere can make the stay more comfortable and enoyable, and encourage patrons to stay longer, order more, and return. Food is a central pivot of customer appraisals, yet other facets of the experience can tilt it either way: spoil and even ruin the experience or instead support and enhance it.

Ron Ventura, Ph.D. (Marketing)

 

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Fifteen years have passed since a Nobel Prize in economics was awarded to Daniel Kahneman to this time (Fall 2017) when another leading researcher in behavioural economics, Richard Thaler, wins this honourable prize. Thaler and Kahneman are no strangers — they have collaborated in research in this field from its early days in the late 1970s. Moreover, Kahneman together with the late Amos Tversky helped Thaler in his first steps in this field, or more generally in meeting economics with psychology. Key elements of Thaler’s theory of Mental Accounting are based on the value function in Kanheman and Tversky’s Prospect theory.

In recent years Thaler is better known for the approach he devised of choice architecture and the tools of nudging, as co-author of the book “Nudge: Improving Decisions About Health, Wealth and Happiness” with Cass Sunstein (2008-9). However, at the core of the contribution of Thaler is the theory of mental accounting where he helped to lay the foundations of behavioural economics. The applied tools of nudging are not appropriately appreciated without understanding the concepts of mental accounting and other phenomena he studied with colleagues which describe deviations in judgement and behaviour from the rational economic model.

Thaler, originally an economist, was unhappy with predictions of consumer choice arising from microeconomics — the principles of economic theory were not contested as a normative theory (e.g., regarding optimization) but claims by economists that the theory is able to describe actual consumer behaviour and predict it were put into question. Furthermore, Thaler and others early on argued that deviations from rational judgement and choice behaviour are predictable.  In his ‘maverick’ paper “Toward a Positive Theory of Consumer Choice” from 1980, Thaler described and explained deviations and anomalies in consumer choice that stand in disagreement with the economic theory. He referred to concepts such as framing of gains and losses, the endowment effect, sunk costs, search for information on prices, regret, and self-control (1).

The theory of mental accounting developed by Thaler thereafter is already an integrated framework that describes how consumers perform value judgements and make choice decisions of products and services to purchase while recognising psychological effects in making economic decisions (2).  The theory is built around three prominent concepts (described here only briefly):

Dividing a budget into categories of expenses: Consumers metaphorically (but sometimes physically) allocate the money of their budget into buckets or envelopes according to type or purpose of expenses. It means that they do not transfer money freely between categories (e.g., food, entertainment). This concept contradicts the economic principle of fungibility, thus suggesting that one dollar is not valued the same in every category. A further implication is that each category has a sub-budget allotted to it, and if expenses in the category during a period surpass its limit, a consumer will prefer to give up on the next purchase and refrain from adding money from another category. Hence, for instance,  Dan and Edna will not go out for dinner at a trendy restaurant if that requires taking money planned for buying shoes for their child. However, managing the budget according to the total limit of income in each month is more often unsatisfactory, and some purchases can still be made on credit without hurting other purchases in the same month. On the other hand, it can readily be seen how consumers get into trouble when they try to spread too many expenses across future periods with their credit cards, and lose track of the category limits for their different expenses.

Segregating gains and integrating losses: In the model of a value function by Kahneman and Tversky, value is defined upon gains and losses as one departs from a reference point (a “status quo” state). Thaler explicated in turn how properties of the gain-loss value function would be implemented in practical evaluations of outcomes. The two general “rules”, as demonstrated most clearly in “pure” cases, say: (a) if there are two or more gains, consumers prefer to segregate them (e.g., if Chris makes gains on two different shares on a given day, he will prefer to see them separately); (b) if there are two or more losses, consumers prefer to integrate them (e.g., Sarah is informed of a price for an inter-city train trip but then told there is a surcharge for travelling in the morning — she will prefer to consider the total cost for her requested journey). Thaler additionally proposed what consumers would prefer doing in more complicated cases of “mixed” gains and losses, whether to segregate between the gain and loss (e.g., if the loss is much greater than the gain) or integrate them (e.g., if the gain is larger than the loss so that one remains with a net gain).

Adding-up acquisition value with transaction value to evaluate product offers: A product or service offer generally exhibits in it benefits and costs to the consumer (e.g., the example of a train ticket above overlooked the benefit of the travel to Sarah). But value may arise from the offering or deal itself beyond the product per se. Thaler recognised that consumers may look at two sources of value, and composing or adding them together would yield the overall worth of a product purchase offer: (1) Acquisition utility is the value of a difference between the [monetary] value equivalent of a product to the consumer and its actual price; (2) Transaction utility is the value of a difference between the actual price and a reference price. In the calculus of value, hides the play of gains and losses. This value concept was quite quickly adopted by consumer and marketing researchers in academia and implemented in means-end models that depict chains of value underlying the purchase decision process of consumers (mostly in the mid-1980s to mid-1990s). Thaler’s approach to ‘analysing’ value is getting more widely acknowledged and applied also in practice, as expressions of value as such in consumer response to offerings can be found in so many domains of marketing and retailing.

A reference price may receive different representations, for instance: the price last paid; price recalled from a previous period; average or median price in the same product class; a ‘normal’ or list price; a ‘fair’ or ‘just’ price (which is not so easy to specify). The transaction value may vary quite a lot depending on the form of reference price a consumer uses, ceteris paribus, and hence affect how the transaction value is represented (i.e., as a gain or a loss and its magnitude). Yet, it also suggests that marketers may hint to consumers a price to be used as a reference price (e.g., an advertised price anchor) and thus influence consumers’ value judgements.

We often observe and think of discounts as a difference between an actual price (‘only this week’) and a higher normal price — in this case we may construe the acquisition value and transaction value as two ways to perceive gain on the actual price concurrently. But the model of Thaler is more general because it recognizes a range of prices that may be employed as a reference by consumers. In addition, a list price may be suspected to be set higher to invoke in purpose the perception of a gain vis-à-vis the actual discounted price which in practice is more regular than the list price. A list price or an advertised price may also serve primarily as a cue for the quality of the product (and perhaps also influence the equivalent value of the product for less knowledgeable consumers), while an actual selling price provides a transaction value or utility. In the era of e-commerce, consumers also appear to use the price quoted on a retailer’s online store as a reference; then they may visit one of its brick-and-mortar stores, where they hope to obtain their desired product faster, and complain if they discover that the price for the same product in-store is much higher. Where customers are increasingly grudging over delivery fees and speed, a viable solution to secure customers is to offer a scheme of ‘click-and-collect at a store near you’. Moreover, when more consumers shop with a smartphone in their hands, the use of competitors’ prices or even the same retailer’s online prices as references is likely to be even more frequent and ubiquitous.


  • The next example may help further to illustrate the potentially compound task of evaluating offerings: Jonathan arrives to the agency of a car dealer where he intends to buy his next new car of favour, but there he finds out that the price on offer for that model is $1,500 higher than a price he saw two months earlier in ads. The sales representative claims prices by the carmaker have risen lately. However, when proposing a digital display system (e.g., entertainment, navigation, technical car info) as an add-on to the car, the seller proposes also to give Jonathan a discount of $150 on its original price tag.
  • Jonathan appreciates this offer and is inclined to segregate this saving apart from the additional pay for the car itself (i.e., ‘silver-lining’). The transaction value may be expanded to include two components (separating the evaluations of the car offer and add-on offer completely is less sensible because the add-on system is still contingent on the car).

Richard Thaler contributed to the revelation, understanding and assessment of implications of additional cognitive and behavioural phenomena that do not stand in line with rationality in the economic sense. At least some of those phenomena have direct implications in the context of mental accounting.

One of the greater acknowledged phenomena by now is the endowment effect. It is the recognition that people value an object (product item) already in their possession more than when having the option of acquiring the same object. In other words, the monetary compensation David would be willing to accept to give up on a good he holds is higher than the amount he would agree to pay to acquire it —  people principally have a difficulty to give up on something they own or endowed with (no matter how they originally obtained it). This effect has been most famously demonstrated with mugs, but to generalise it was also tested with other items like pens. This effect may well squeeze into consumers’ considerations when trying to sell much more expensive properties like their car or apartment, beyond an aim to make a financial gain. In his latest book on behavioural economics, ‘Misbehaving’, Thaler provides a friendly explanation with graphic illustration as to why fewer transactions of exchange occur between individuals who obtain a mug and those who do not, due to the endowment effect vis-à-vis a prediction by economic theory (3).

Another important issue of interest to Thaler is fairness, such as when it is fair or acceptable to charge a higher price from consumers for an object in shortage or hard to obtain (e.g., shovels for clearing snow on the morning after a snow storm). Notably, the perception of “fairness” may be moderated depending on whether the rise in price is framed as a reduction in gain (e.g., a discount of $2o0 from list price being cancelled for a car in short supply) or an actual loss (e.g., an explicit increase of $200 above the list price) — the change in actual price is more likely to be perceived as acceptable in the former case than the latter (4). He further investigated fairness games (e.g., Dictator, Punishment and Ultimatum). Additional noteworthy topics he studied are susceptibility to sunk cost and self-control.

  • More topics studied by Thaler can be traced by browsing his long list of papers over the years since the 1970s, and perhaps more leisurely through his illuminating book: “Misbehaving: The Making of Behavioural Economics” (2015-16).

The tactics of nudging, as part of choice architecture, are based on lessons from the anomalies and biases in consumers’ procedures of judgement and decision-making studied by Thaler himself and others in behavioural economics. Thaler and Sunstein looked for ways to guide or lead consumers to make better choices for their own good — health, wealth and happiness — without attempting to reform or alter their rooted modes of thinking and behaviour, which most probably would be doomed to failure. Their clever idea was to work within the boundaries of human behaviour to modify it just enough and in a predictable way to put consumers on a better track to a choice decision. Nudging could mean diverting a consumer from his or her routine way of making a decision to arrive to a different, expectedly better, choice outcome. It often likely involves taking a consumer out of his or her ‘comfort zone’. Critically important, however, Thaler and Sunstein conditioned in their book ‘Nudge’ that: “To count as a mere nudge, the intervention must be easy and cheap to avoid. Nudges are not mandates“. Accordingly, nudging techniques should not impose on consumers the choice of any designated or recommended options (5).

Six categories of nudging techniques are proposed: (1) defaults; (2) expect errors; (3) give feedback; (4) understanding “mappings”; (5) structure complex choices; and (6) incentives. In any of these techniques, the intention is to allow policy makers to direct consumers to choices that improve the state of consumers. Yet, the approach they advocate of ‘libertarian paternalism’ is not received without contention —  while libertarian, that is without coercing a choice, a question remains what gives an agency or policy maker the wisdom and right to determine which options should be better off for consumers (e.g., health plans, saving and investment programmes). Thaler and Sunstein discuss the implementation of nudging mostly in the context of public policy (i.e., by government agencies) but these techniques are applicable just as well to plans and policies of private agencies or companies (e.g., banks, telecom service providers, retailers in their physical and online stores). Nevertheless, public agencies and even more so business companies should devise and apply any measures of nudging to help consumers to choose the better-off and fitting plans for them; it is not for manipulating the consumers or taking advantage of their human errors and biases in judgement and decision-making.

Richard Thaler reviews and explains in his book “Misbehaving” the phenomena and issues he has studied in behavioural economics through the story of his rich research career — it is an interesting, lucid and compelling story. He tells in a candid way about the stages he has gone through in his career. Most conspicuously, this story also reflects the obstacles and resistance that faced behavioural economists for at least 25-30 years.

Congratulations to Professor Richard Thaler, and to the field of behavioural economics to which he contributed wholesomely, in theory and in its application.    

Ron Ventura, Ph.D. (Marketing)

Notes:

(1) Toward a Positive Theory of Consumer Choice; Richard H. Thaler, 1980/2000; in Choices, Values and Frames (eds. Daniel Kahneman and Amos Tversky)[Ch. 15: pp. 269-287], Cambridge University Press. (Originally published in Journal of Economic Behaviour and Organization.)

(2) Mental Accounting and Consumer Choice; Richard H. Thaler, 1985; Marketing Science, 4 (3), pp. 199-214.

(3) Misbehaving: The Making of Behavioural Economics; Richard H. Thaler, 2016; UK: Penguin Books (paperback).

(4) Anomalies: The Endowment Effect, Loss Aversion, and Status Quo Bias; Daniel Kahneman, Jack L. Knetsch, & Richard H. Thaler, 1991/2000; in Choices, Values and Frames (eds. Daniel Kahneman and Amos Tversky)[Ch. 8: pp. 159-170], Cambridge University Press. (Originally published in Journal of Economic Perspectives).

(5) Nudge: Improving Decisions About Health, Wealth, and Happiness; Richard H. Thaler and Cass R. Sunstein, 2009; UK: Penguin Books (updated edition).

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The discipline of consumer behaviour is by now well versed in the distinction between System 1 and System 2 modes of thinking, relating in particular to consumer judgement and decision making, with implications for marketing and retail management. Much appreciative gratitude is owed to Nobel Prize Laureate in economics Daniel Kahneman for bringing forward the concept of these thinking systems to the knowledge of the wider public (i.e., beyond academics) in his book “Thinking, Fast and Slow” (2012). ‘System 1’ and ‘System 2’, though not always using these labels, have been identified and elaborated by psychologists earlier than Kahneman’s book, as the author so notes. However, Kahneman succeeds in making more crystal clear the concepts of these different modes of thinking while linking them to phenomena studied in his own previous research, most notably in collaboration with the late Amos Tversky.

In a nutshell: System 1’s type of thinking is automatic, associative and intuitive; it tends to respond quickly, but consequently it is at higher risk of jumping to wrong conclusions. It is the ‘default’ type of thinking that guides human judgement, decisions and behaviour much of the time. On the other hand, System 2’s type of thinking is deliberative, logical, critical, and effortful; it involves deeper concentration and more complex computations and rules. System 2 has to be called to duty voluntarily, activating rational thinking and careful reasoning. Whereas thinking represented by System 1 is fast and reflexive, that of System 2 is slow and reflective.

Kahneman describes and explains the role, function and effect of System 1 and System 2 in various contexts, situations or problems. In broad terms: Thinking of the System 1 type comes first; System 2 either passively adopts impressions, intuitive judgements and recommendations by System 1 or actively kicks-in for more orderly examination and correction (alas, it tends to be lazy, not in a hurry to volunteer). Just to give a taste, below is a selection of situations and problems in which Kahneman demonstrates the important differences between these two modes of thinking, how they operate and the outcomes they effect:

  • # Illusions (e.g., visual, cognitive)  # Use of memory (e.g., computations, comparisons)  # Tasks requiring self-control  # Search for causal explanations  # Attending to information (“What You See Is All There Is”)  # Sets and prototypes (e.g., ‘average’ vs. ‘total’ assessments)  # Intensity matching  # ‘Answering the easier question’ (simplifying by substitution)  # Predictions (also see correlation and regression, intensity matching, representativeness)  # Choice in opt-in and opt-out framing situations (e.g., organ donation)
  • Note: In other contexts presented by Kahneman (e.g., validity illusion [stock-picking task], choice under Prospect Theory), the author does not connect them explicitly to  System 1 or System 2 so their significance may only be indirectly implied by the reader.

In order to gain a deeper understanding of System 1 and System 2 we should inspect the detailed aspects differentiating between these thinking systems. The concept of the two systems actually emerges from binding multiple dual-process theories of cognition together, thus appearing to be a larger cohesive theory of modes of thinking. Each dual process theory is usually focused on a particular dimension that distinguishes between two types of cognitive processes the human mind may utilise. However, those dimensions ‘correlate’ or ‘co-occur’, and a given theory often adopts aspects from other similar theories or adds supplementary properties; the dual-system conception hence is built on this conversion. The aspects or properties used to describe the process in each type of system are extracted from those dual-process theories. A table presented by Stanovich (2002) helps to see how System 1 and System 2 contrast in various dual-process theories. Some of those theories are: [For brevity, S1 and S2 are applied below to refer to each system.)

  • S1: Associative system / S2: Rule-based system (Sloman)
  • S1: Heuristic processing / S2: Analytic processing (Evans)
  • S1: Tacit thought process / S2: Explicit thought process (Evans and Over)
  • S1: Experiential system / S2: Rational system (Epstein)
  • S1: Implicit inference / S2: Explicit inference (Johnson-Laird)
  • S1: Automatic processing / S2: Controlled processing (Shiffrin and Schneider)

Note: Evans and Wason related to Type 1 vs. Type 2 processes already in 1976.

  • Closer to consumer behaviour: Central processing versus peripheral processing in the Elaboration Likelihood Model (Petty, Cacioppo & Schumann) posits a dual-process theory of routes to persuasion.

Each dual process theory provides a rich and comprehensive portrayal of two different thinking modes. The theories complement each other but they do not necessarily depend on each other. The boundaries between the two types of process are not very sharp, that is, features of the systems are not all exclusive in the sense that a particular property associated with a process of System 1 may occur in a System 2 process, and vice versa. Furthermore, the processes also interact with one another, particularly in a way where System 2 relies on products of thought from System 1, either approving them or using them as a starting-point for further analysis. Nevertheless, occasionally System 2 may generate reasons for us merely to justify a choice made by System 1 (e.g., a consumer likes a product for the visual appearance of its packaging or its design).

Stanovich follows the table of theories with a comparison of properties describing System 1 versus System 2 as derived from a variety of dual process theories, but without attributing them to any specific theory (e.g., holistic/analytic, relatively fast/slow, highly contextualized/decontextualized). Comparative lists of aspects or properties have been offered by other researchers as well. Evans (2008) formed a comparative list of more than twenty attributes which he divided into four clusters (describing System 1/System 2):

  • Cluster 1: Consciousness (e.g., unconscious/conscious, automatic/controlled, rapid/slow, implicit/explicit, high capacity/low capacity)
  • Cluster 2: Evolution (e.g., evolutionary old/recent, nonverbal/linked to language)
  • Cluster 3: Functional characteristics (e.g.,  associative/rule-based, contextualized/abstract, parallel/sequential)
  • Cluster 4: individual differences (universal/heritable, independent of/linked to general intelligence, independent of/limited by working memory capacity).

Listings of properties collated from different sources (models, theories), interpreted as integrative profiles of System 1 and System 2 modes of thinking, may yield a misconception of the distinction between the two systems as representing an over-arching theory. Evans questions whether it is really possible and acceptable to tie the various theories of different origins under a common roof, suggested as an over-arching cohesive theory of two systems (he identifies problems residing mainly with ‘System 1’). It could be more appropriate to approach the dual-system presentation as a paradigm or framework to help one grasp the breadth of aspects that may distinguish between two types of cognitive processes and obtain a more comprehensive picture of cognition. The properties are not truly required to co-occur altogether as constituents of a whole profile of one system or the other. In certain domains of judgement or decision problems, a set of properties may jointly describe the process entailed. Some dual process theories may take different perspectives on a similar domain, and hence the aspects derived from them are related and appear to co-occur.

  • Evans confronts a more widely accepted ‘sequential-interventionist’ view (as described above) with a ‘parallel-competitive’ view.

People use a variety of procedures and techniques to form judgements, make decisions or perform any other kind of cognitive task. Stanovich relates the structure, shape and level of sophistication of the mental procedures or algorithms of thought humans can apply, to their intelligence or cognitive capacity, positioned at the algorithmic level of analysis. Investing more effort in more complicated techniques or algorithms entailed in rational thinking is a matter of volition, positioned at the intentional level (borrowed from Dennett’s theorizing on consciousness).

However, humans do not engage a great part of the time in thought close to the full of their cognitive capacity (e.g., in terms of depth and efficiency). According to Stanovich, we should distinguish between cognitive ability and thinking dispositions (or styles). The styles of thinking a person applies do not necessarily reflect everything one is cognitively capable of. Put succinctly, the fact that a person is intelligent does not mean that he or she has to think and act rationally; one has to choose to do so and invest the required effort into it. When one does not, it opens the door for smart people to act stupidly. Furthermore, the way a person is disposed to think is most often selected and executed unconsciously, especially when the thinking disposition or style is relatively fast and simple. Cognitive styles that are entailed in System 1, characterised as intuitive, automatic, associative and fast, are made to ease the cognitive strain on the brain, and they are most likely to occur unconsciously or preconsciously. Still, being intuitive and using heuristics should not imply a person will end up acting stupidly — some would argue his or her intuitive decision could be more sensible than one made when trying to think rationally; it may depend on how thinking in the realm of System 1 happens — if one rushes while applying an inappropriate heuristic or relying on an unfitting association, he or she could become more likely to act stupidly (or plainly, ‘being stupid’).

Emotion and affect are more closely linked to System 1. Yet, emotion should not be viewed ultimately as a disruptor of rationality. As proposed by Stanovich, emotions may fulfill an important adaptive regulatory role — serving as interrupt signals necessary to achieve goals, avoiding entanglement in complex rational thinking that only keeps one away from a solution, and reducing a problem to manageable dimensions. In some cases emotion does not disrupt rationality but rather help to choose when it is appropriate and productive to apply a rational thinking style (e.g., use an optimization algorithm, initiate counterfactual thinking). By switching between two modes of thinking, described as System 1 and System 2, one has the flexibility to choose when and how to act in reason or be rational, and emotion may play the positive role of a guide.

The dual-system concept provides a way of looking broadly at cognitive processes that underlie human judgement and decision making. System 1’s mode of thinking is particularly adaptive by which it allows a consumer to quickly sort out large amounts of information and navigate through complex and changing environments. System 2’s mode of thinking is the ‘wise counselor’ that can be called to analyse the situation more deeply and critically, and provide a ‘second opinion’ like an expert. However, it intervenes ‘on request’ when it receives persuasive signals that its help is required. Consideration of aspects distinguishing between these two modes of thinking by marketing and retail managers can help them to better understand how consumers conduct themselves and cater to their needs, concerns, wishes and expectations. Undertaking this viewpoint can especially help, for instance, in the area of ‘customer journeys’ — studying how thinking styles direct or lead the customer or shopper through a journey (including emotional signals), anticipating reactions, and devising methods that can alleviate conflicts and reduce friction in interaction with customers.

Ron Ventura, Ph.D. (Marketing)

References:

(1)  Thinking, Fast and Slow; Daniel Kahneman, 2012; Penguin Books.

(2) Rationality, Intelligence, and Levels of Analysis in Cognitive Science (Is Dysrationalia Possible); Keith E. Stanovich, 2002; in Why Smart People Can Be So Stupid (Robert J. Sternberg editor)(pp. 124-158), New Haven & London: Yale University Press.

(3) Dual-Processing Accounts of Reasoning, Judgment and Social Cognition; Jonathan St. B. T. Evans, 2008; Annual Review of Psychology, 59, pp. 255-278. (Available online at psych.annualreviews.org, doi: 10.1146/annurev.psych.59.103006.093629).

 

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A shopper may well know what types of products he or she is planning to buy in a store, but what products the shopper will come out with is much less sure. Frequently there will be some additional unplanned products in the shopper’s basket. This observation is more often demonstrated in the case of grocery shopping in supermarkets, but it is likely to hold true also in other types of stores, especially large ones like department stores, fashion stores, and DIY or home improvement stores.

There can be a number of reasons or triggers for shoppers to consider additional products to purchase during the shopping trip itself — products forgotten and reminded of by cues that arise while shopping, attractiveness of visual appearance of product display (‘visual lift’), promotions posted on tags at the product display (‘point-of-purchase’) or in hand-out flyers, and more. The phenomenon of unplanned purchases is very familiar, and the study of it is not new. However, the behaviour of shoppers during their store visit that leads to this outcome, especially the consideration of product categories in an unplanned manner, is not understood well enough. The relatively new methodology of video tracking with a head-mounted small camera shows promise in gaining better understanding of shopper behaviour during the shopping trip; a research article by Hui, Huang, Suher and Inman (2013) is paving the way with a valuable contribution, particularly in shedding light on the relations between planned and unplanned considerations in a supermarket, and the factors that may drive conversion of the latter into purchases (1).

Shopper marketing is an evolving specialisation which gains increasing attention in  marketing and retailing. It concerns activities of consumers performed in a ‘shopper mode’ and is strongly connected with or contained within consumer marketing. Innovations in this sub-field by retailers and manufacturers span digital activities, multichannel marketing, store atmospherics and design, in-store merchandising, shopper marketing metrics and organisation. However, carrying out more effective and successful shopper marketing programmes requires closer collaboration between manufacturers and retailers — more openness to each party’s perspective and priorities (e.g., in interpretation of shopper insights), sharing information and coordination (2).

In-Store Video Tracking allows researchers to observe the shopping trip as it proceeds from the viewpoint of the shopper, literally. The strength of this methodology is in capturing the dynamics of shopping (e.g., with regard to in-store drivers of unplanned purchases). Unlike other approaches (e.g., RFID, product scanners), the video tracking method enables tracking acts of consideration, whether followed or not by purchase (i.e., putting a product item in the shopping cart).

For video tracking, a shopper is asked to wear, with the help of an experimenter, a headset belt that contains the portable video equipment, including a small video camera, a view/record unit, and a battery pack. It is worn like a Bluetooth headset. In addition, the equipment used by Hui et al. included an RFID transmitter that allows to trace the location of the shopper throughout his or her shopping path in a supermarket.

Like any research methodology, video tracking has its strengths and advantages versus its weaknesses and limitations. With the camera it is possible to capture the shopper’s field of vision during a shopping trip; the resulting video is stored in the view/record unit. However, without an eye-tracking (infrared) device, the camera may not point accurately to the positions of products considered (by eye fixation) in the field of vision. Yet, the video supports at least approximate inferences when a product is touched or moved, or the head-body posture and gesture suggest from which display a shopper considers products (i.e., the ‘frame’ closes-in on a section of the display). It is further noted that difficulties in calibrating an eye-tracking device in motion may impair the accuracy of locating fixations. The video camera seems sufficient and effective for identifying product categories as targets of consideration and purchase.

Furthermore, contrary to video filmed from cameras hanging from the ceiling in a store, the head-mounted camera records the scene at eye-level and not from high above, enabling to better notice what the shopper is doing (e.g., in aisles), and it follows the shopper all the way, not just in selected sections of the store. Additionally, using a head-mounted camera is more ethical than relying on surrounding cameras (often CCTV security cameras). On the other hand, head-mounted devices (e.g., camera, eye-tracking), which are not the most natural to wear whilst shopping, raise concerns of sampling bias (self-selection) and possibly causing change in the behaviour of the shopper; proponents argue that shoppers quickly forget of the device (devices are now made lighter) as they engage in shopping, but the issue is still in debate.

Video tracking is advantageous to RFID  and product scanners for the study of unplanned purchase behaviour by capturing acts of consideration: the RFID method alone (3) enables to trace the path of the shopper but not what one does in front of the shelf or stand display, and a scanner method allows to record what products are purchased but not which are considered. The advantage of the combined video + RFID approach according to Hui and his colleagues is in providing them “not only the shopping path but also the changes in the shoppers’ visual field as he or she walks around the store” (p. 449).

The complete research design included two interviews conducted with each shopper-participant — before the shopping trip, as a shopper enters the store, and after, on the way out. In the initial interview, shoppers were asked in which product categories they were planning to buy (aided by a list to choose from), as well as other shopping aspects (e.g., total budget, whether they brought their own shopping list). At the exit the shoppers were asked about personal characteristics, and the experimenters collected a copy of the receipt from the retailer’s transaction log. The information collected was essential for two aspects in particular: (a) distinguishing between planned and unplanned considerations; and (b) estimating the amount of money remaining for the shopper to make unplanned purchases out of the total budget (‘in-store slack’ metric).

237 participants were included in analyses. Overall, shoppers-participants planned to purchase from approximately 5.5 categories; they considered on average 13 categories in total, of which fewer than 5 were planned considerations (median 5.6). 37% of the participants carried a list prepared in advance.

Characteristics influencing unplanned consideration:  The researchers sought first to identify personal and product characteristics that significantly influence the probability of making an unplanned consideration in each given product category (a latent utility likelihood model was constructed). Consequently, they could infer which characteristics contribute to considering more categories in an unplanned manner. The model showed, for instance, that shoppers older in age and female shoppers are likely to engage in unplanned consideration in a greater number of product categories. Inversely, shoppers who are more familiar with a store (layout and location of products) and those carrying a shopping list tend to consider fewer product categories in an unplanned manner.

At a product level, a higher hedonic score for a product category is positively associated with greater incidence of unplanned consideration of it. Products that are promoted in the weekly flyer of the store at the time of a shopper’s visit are also more likely to receive an unplanned consideration from the shopper. Hui et al. further revealed effects of complementarity relations: products that were not planned beforehand for purchase (B) but are closer complementary of products in a ‘planned basket’ of shoppers (A) gain a greater likelihood of being considered in an unplanned manner (‘A –> B lift’).  [The researchers present a two-dimensional map detailing what products are more proximate and thus more likely to get paired together, not dependent yet on purchase of them].

Differences in behaviour between planned and unplanned considerations: Unplanned considerations tend to be made more haphazardly — while standing farther from display shelves and involving fewer product touches; conversely, planned considerations entail greater ‘depth’. Unplanned considerations tend to occur a little later in the shopping trip (the gap in timing is not very convincing). An unplanned consideration is less likely to entail reference to a shopping list — the list serves in “keeping the shopper on task”, being less prone to divert to unplanned consideration. Shoppers during an unplanned consideration are also less likely to refer to discount coupons or to in-store flyers/circulars. However, interestingly, some of the patterns found in this analysis change as an unplanned consideration turns into a purchase.

Importantly, in the outcome unplanned considerations are less likely to conclude with a purchase (63%) than planned considerations (83%). This raises the question, what can make an unplanned consideration result in purchase conversion?

Drivers of purchase conversion of unplanned considerations: Firstly, unplanned considerations that result in a purchase take longer (40 seconds on average) than those that do not (24 seconds). Secondly, shoppers get closer to the shelves and touch more product items before concluding with a purchase; the greater ‘depth’ of the process towards unplanned purchase is characterised by viewing fewer product displays (‘facings’) within the category — the shopper is concentrating on fewer alternatives yet examines those selected more carefully (e.g., by picking them up for a closer read). Another conspicuous finding is that shoppers are more likely to refer to a shopping list during an unplanned consideration that is going to result in a purchase — a plausible explanation is that the shopping list may help the shopper to seek whether an unplanned product complements a product on the list.

The researchers employed another (latent utility) model to investigate more systemically the drivers likely to lead unplanned considerations to result in a purchase. The model supported, for example, that purchase conversion is more likely in categories of  higher hedonic products. It corroborated the notions about ‘depth’ of consideration as a driver to purchase and the role of a shopping list in realising complementary unplanned products as supplements to the ‘planned basket’. It is also shown that interacting with a service staff for assistance increases the likelihood of concluding with a purchase.

  • Location in the store matters: An aisle is relatively a more likely place for an unplanned consideration to occur, and subsequently has a better chance when it happens to result in a purchase. The authors recommend assigning service staff to be present near aisles.

Complementarity relations were analysed once again, this time in the context of unplanned purchases. The analysis, as visualised in a new map, indicates that proximity between planned and unplanned categories enhances the likelihood of an unplanned purchase: if a shopper plans to purchase in category A, then the closer category B is to A, the more likely is the shopper to purchase in category B given it is considered. Hui et al. note that distances in the maps for considerations and for purchase conversion of unplanned considerations are not correlated, implying hence that the unplanned consideration and a purchase decision are two different dimensions in the decision process. This is a salient result because it distinguishes between engaging in consideration and the decision itself. The researchers caution, however, that in some cases the distinction between consideration and a choice decision may be false and inappropriate because they may happen rapidly in a single step.

  • The latent distances in the maps are also uncorrelated with physical distances between products in the supermarket (i.e., the complementarity relations are mental).

The research shows that while promotion (coupons or in-store flyers) for an unplanned product has a significant effect in increasing the probability of its consideration, it does not contribute to probability of its purchase. This evidence furthermore points to a separation between consideration and a decision. The authors suggest that a promotion may attract shoppers to consider a product, but they are mostly uninterested to buy and hence it has no further effect on their point-of-purchase behaviour. The researchers suggest that retailers can apply their model of complementarity to proactively invoke consideration by triggering a real-time promotion on a mobile shopping app for products associated with those on a digital list of the shopper “so a small coupon can nudge this consideration into a purchase”.

But there are some reservations to be made about the findings regarding promotions. An available promotion can increase the probability of a product to be considered in an unplanned manner, yet shoppers are less likely to look at their coupons or flyers at the relevant moment. Inversely, the existence of a promotion does not contribute to purchase conversion of an unplanned consideration but shoppers are more likely to refer to their coupons or flyers during unplanned considerations that result in a purchase.  A plausible explanation to resolve this apparent inconsistency is that reference to a promotional coupon or flyer is more concrete from a shopper viewpoint than the mere availability of a promotion; shoppers may not be aware of some of the promotions the researchers account for. In the article, the researchers do not address directly promotional information that appears on tags at the product display — such promotions may affect shoppers differently from flyers or distributed coupons (paper or digital via mobile app), because tags are more readily visible at the point-of-purchase.

One of the dynamic factors examined by Hui et al. is the ‘in-store slack’, the mental budget reserved for unplanned purchases. Reserving a larger slack increases the likelihood of unplanned considerations. Furthermore, at the moment of truth, the larger is the in-store slack that remains at the time of an unplanned consideration, the more likely is the shopper to take a product from the display to purchase. However, computations used in the analyses of dynamic changes in each shopper’s in-store slack appear to assume that shoppers estimate how much they already spent on planned products in various moments of the trip and are aware of their budget, an assumption not very realistic. The approach in the research is very clever, and yet consumers may not be so sophisticated: they may exceed their in-store slack, possibly because they are not very good in keeping their budget (e.g., exacerbated by use of credit cards) or in making arithmetic computations fluently.

Finally, shoppers could be subject to a dynamic trade-off between their self-control and the in-store slack. As the shopping trip progresses and the remaining in-store slack is expected to shrink, the shopper becomes less likely to allow an unplanned purchase, but he or she may become more likely to be tempted to consider and buy in an unplanned manner, because the strength of one’s self-control is depleted following active decision-making. In addition, a shopper who avoided making a purchase on the last occasion of unplanned consideration is more likely to purchase a product in the next unplanned occasion — this negative “momentum” effect means that following an initial effort at self-control, subsequent attempts are more likely to fail as a result of depletion of the strength of self-control.

The research of Hui, Huang, Suher and Inman offers multiple insights for retailers as well as manufacturers to take notice of, and much more material for thought and additional study and planning. The video tracking approach reveals patterns and drivers of shopper behaviour in unplanned considerations and how they relate to planned considerations.  The methodology is not without limitations; viewing and coding the video clips is notably time-consuming. Nevertheless, this research is bringing us a step forward towards better understanding and knowledge to act upon.

Ron Ventura, Ph.D. (Marketing)

Notes:

(1) Deconstructing the “First Moment of Truth”: Understanding Unplanned Consideration and Purchase Conversion Using In-Store Video Tracking; Sam K. Hui, Yanliu Huang, Jacob Suher, & J. Jeffrey Inman, 2013; Journal of Marketing Research, 50 (August), pp. 445-462.

(2) Innovations in Shopper Marketing: Current Insights and Future Research Issues; Venkatesh Shankar, J. Jeffrey Inman, Murali Mantrala, & Eileen Kelley, 2011; Journal of Retailing, 87S (1), pp. S29-S42.

(3) See other research on path data modelling and analysis in marketing and retailing by Hui with Peter Fader and Eric Bradlow (2009).

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A new film this year, “Sully”, tells the story of US Airways Flight 1549 that landed safely onto the water surface of the Hudson River on 15 January 2009 following a drastic damage to the plane’s two engines. This article is specifically about the decision process of the captain Chesley (Sully) Sullenberger with the backing of his co-pilot (first officer) Jeff Skiles; the film helps to highlight some instructive and interesting aspects of human judgement and decision-making in an acute crisis situation. Furthermore, the film shows how those cognitive processes contrast with computer algorithms and simulations and why the ‘human factor’ must not be ignored.

There were altogether 155 people on board of the Airbus A320 aircraft in its flight 1549 from New-York to North Carolina: 150 passengers and five crew members. The story unfolds whilst following Sully in the aftermath of the incident during the investigation of the US National Transportation Safety Board (NTSB) which he was facing together with Skiles. The film (directed by Clint Eastwood, featuring Tom Hanks as Sully and Aaron Ackhart as Skiles, 2016) is based on Sullenberger’s autobiographic book “Highest Duty: My Search for What Really Matters” (2009). Additional resources such as interviews and documentaries were also used in preparation of this article.

  • The film is excellent, recommended for its way of delivering the drama of the story during and after the flight, and for the acting of the leading actors. A caution to those who have not seen the film: the article includes some ‘spoilers’. On the other hand, facts of this flight and the investigation that followed were essentially known before the film.

This article is not explicitly about consumers, although the passengers, as customers, were obviously directly affected by the conduct of the pilots as it saved their lives. The focus, as presented above, is on the decision process of the captain Sullenberger. We may expect that such an extraordinary positive outcome of the flight, rescued from a dangerous circumstance, would have a favourable impact on the image of the airline US Airways that employs such talented flight crew members. But improving corporate image or customer service and relationships were not the relevant considerations during the flight, just saving lives.

Incident Schedule: Less than 2 minutes after take-off (at ~15:27) a flock of birds (Canada geese) clashed into both engines of the aircraft. It is vital to realise that from that moment, the flight lasted less than four minutes! The captain took control of the plane from his co-pilot immediately after impact with the birds, and then had between 30 seconds to one minute to make a decision where to land.  Next, just 151 seconds passed from impact with the birds and until the plane was approaching right above the Hudson river for landing on the water. Finally, impact with water occurred 208 seconds after impact with the birds (at ~15:30).

Using Heuristics: The investigators of NTSB told Sully (Hanks) about flight calculations performed in their computer simulations, and argued that according to the simulation results it had not been inevitable to land on the Hudson river, a highly risky type of crash-land. In response, Sully said that it had been impossible for himself and Skiles to perform all those detailed calculations during the four minutes of the flight after the impact of the birds with the aircraft’s engines; he was relying instead on what he saw with his eyes in front of him — the course of the plane and the terrain below them as the plane was gliding with no engine power.

The visual guidance Sully describes as using to navigate the plane resembles a type of ‘gaze heuristic’ identified by professor Gerd Gigerenzer (1). In the example given by Gigerenzer, a player who tries to catch a ball flying in the air does not have time to calculate the trajectory of the ball, considering its initial position, speed and angle of projection. Moreover, the player should also take into account wind, air resistance and ball spin. The ball would be on the ground by the time the player makes the necessary estimations and computation. An alternative intuitive strategy (heuristic) is to ‘fix gaze on the ball, start running, and adjust one’s speed so that the angle of gaze remains constant’. The situation of the aircraft flight is of course different, more complex and perilous, but a similar logic seems to hold: navigating the plane in air safely towards the terrain surface (land or water) when there is no time for any advanced computation (the pilot’s gaze would have to be fixed on the terrain beneath towards a prospect landing ‘runway’). Winter winds in New-York City on that frozen day have probably made the landing task even more complicated.  But in those few minutes available to Sully, he found this type of ‘gaze’ or eyesight guiding rule the most practical and helpful.

Relying on Senses: Sullenberger made extensive use of his senses (visual, auditory, olfactory) to collect every information he could get from his surrounding environment. To start with, the pilots could see the birds coming in front of them right before some of them were clashing into the engines — this evidence was crucial to identifying instantly the cause of the problem though they still needed some time to assess the extent of damage. In an interview to CBS’s programme 60 Minutes (with Katie Couric, February 2009), Sully says that he saw the smoke coming out from both engines, smelled the burned flesh of the birds, and subsequently heard a hushing noise from the engines (i.e., made by the remaining blades). He could also feel the trembling of the broken engines. This multi-modal sensory information contributed to convincing him that the engines were lost (i.e., unable to produce thrust) in addition to failure to restart them. Sully also utilised all that time information from the various meters or clocks in the cockpit dashboard in front of him (while Skiles was reading to him from the manuals). The captain was thus attentive to multiple visual stimuli (including and beyond using a visual guidance heuristic) in his decision process, from early judgement to action on his decision to land onto the water of the Hudson river.

Computer algorithms can ‘pick-up’ and process all the technical information of the aircraft displayed to the pilots in the cockpit. The algorithms may also apply in the computations additional measurements (e.g., climate conditions) and perhaps data from sensors installed in the aircraft. But the computer algorithms cannot ‘experience’ the flight event like the pilots. Sully could ‘feel the aircraft’, almost simultaneously and rapidly perceive the sensory stimuli he received in the cockpit, within and outside the cabin, and respond to them (e.g., make judgement). Information available to him seconds after impact with the birds gave him indications about the condition of the engines that algorithms as used in the simulations could not receive. That point was made clear in the dispute that emerged between Sully and the investigating committee with regard to the condition of one of the engines. The investigators claimed that early tests and simulations suggested one of the engines was still functioning and could allow the pilots to bring the plane to land in one of the nearby airports (returning to La Guardia or reverting to Teterboro in New-Jersey). Sully (Hanks) disagreed and argued that his indications were clear that the second engine referred to was badly damaged and non-functional — both engines had no thrust. Sully was proven right — the committee eventually updated that missing parts of the disputed engine were found and showed that the engine was indeed non-functional, disproving the early tests.

Timing and the Human Factor: The captain Sullenberger had furthermore a strong argument with the investigating committee of NTSB about their simulations in attempt to re-construct or replicate the sequence of events during the flight. The committee argued that pilots in a flight simulator ‘virtually’ made a successful landing in both La Guardia and Teterboro airports when the simulator computer was given the data of the flight. Sully (Hanks) found a problem with those live but virtual simulations. The flight simulation was flawed because it made the assumption the pilots could immediately know where it was possible to land, and they were instructed to do so. Sully and Skiles indeed knew immediately the cause of damage but still needed time to assess the extent of damage before Sully could decide how to react. Therefore, they could not actually turn the plane towards one of those airports right after bird impact as the simulating pilots did. The committee ignored the human factor, as argued by Sully, that had required him up to one minute to realise the extent of damage and his decision options.

The conversation of Sully with air controllers demonstrates his assessments step-by-step in real-time that he could not make it to La Guardia or alternatively to Teterboro — both were effectively considered — before concluding that the aircraft may find itself in the water of the Hudson. Then the captain directed the plane straight above the river in approach to crash-landing. One may also note how brief were his response statements to the air controller.  Sully was confident that landing on the Hudson was “the only viable alternative”. He told so in his interview to CBS. In the film, Sully (Hanks) told Skiles (Ackhart) during a recuperating break outside the committee hall that he had no question left in his mind that they have done the right thing.

Given the strong resistance of Sully, the committee ordered additional flight simulations where the pilots were “held” waiting for 35 seconds to account for the time needed to assess the damage before attempting to land anywhere. Following this minimum delay the simulating pilots failed to land safely neither at La Guardia nor at Teterboro. It was evident that those missing seconds were critical to arriving in time to land in those airports. Worse than that, the committee had to admit (as shown in the film) that the pilots made multiple attempts (17) in their simulations before ‘landing’ successfully in those airports. The human factor of evaluation before making a sound decision in this kind of emergency situation must not be ignored.

Delving a little deeper into the event helps to realise how difficult the situation was.  The pilots were trying to execute a three-part checklist of instructions. They were not told, however, that those instructions were made to match a situation of loss of both engines at a much higher altitude than they were at just after completing take-off. The NTSB’s report (AAR-10-03) finds that the dual engine failure at a low altitude was critical — it allowed the pilots too little time to fulfill the existing three-part checklist. In an interview to Newsweek in 2015, Sullenberger said on that challenge: “We were given a three-page checklist to go through, and we only made it through the first page, so I had to intuitively know what to do.”  The NTSB committee further accepts in its report that landing at La Guardia could succeed only if started right after the bird strike, but as explained earlier, that was unrealistic; importantly, they note the realisation made by Sullenberger that an attempt to land at La Guardia “would have been an irrevocable choice, eliminating all other options”.

The NTSB also commends Sullenberger in its report for operating the Auxiliary Power Unit (APU). The captain asked Skiles to try operating the APU after their failed attempt to restart the engines. Sully decided to take this action before they could reach the article on the APU in the checklist. The operation of the APU was most beneficial according to NTSB to allow electricity on board.

Notwithstanding the judgement and decision-making capabilities of Sully, his decision to land on waters of the Hudson river could have ended-up miserably without his experience and skills as a pilot to execute it rightly. He has had 30 years of experience as a commercial pilot in civil aviation since 1980 (with US Airways and its predecessors), and before that had served in the US Air Force in the 1970s as a pilot of military jets (Phantom F-4). The danger in landing on water is that the plane would swindle and not reach in parallel to the water surface, thus one of the wings might hit water, break-up and cause the whole plane to capsize and break-up into the water (as happened in a flight in 1996). That Sully succeeded to safely “ditch” on water surface is not obvious.

The performance of Sullenberger from decision-making to execution seems extraordinary. His judgement and decision capacity in these flight conditions may be exceptional; it is unclear if other pilots could perform as well as he has done. Human judgement is not infallible; it may be subject to biases and errors and succumb to information overload. It is not too difficult to think of examples of people making bad judgements and decisions (e.g., in finance, health etc.). Yet Sully has demonstrated that high capacity of human judgement and sound decision-making exists, and we can be optimistic about that.

It is hard, and not straightforward, to extend conclusions from flying airplanes to other areas of activity. In one aspect, however, there can be some helpful lessons to learn from this episode in thinking more deeply and critically about the replacement of human judgement and decision-making with computer algorithms, machine learning and robotics. Such algorithms work best in familiar and repeated events or situations. But in new and less familiar situations and in less ordinary and more dynamic conditions humans are able to perform more promptly and appropriately. Computer algorithms can often be very helpful but they are not always and necessarily superior to human thinking.

This kind of discussion is needed, for example, in respect to self-driving cars. It is a very active field in industry these days, connecting automakers with technology companies for installing autonomous computer driving systems in cars. Google is planning on creating ‘driverless’ cars without a steering wheel or pedals; their logic is that humans should not be involved anymore in driving: “Requiring a licensed driver be able to take over from the computer actually increases the likelihood of an accident because people aren’t that reliable” (2). This claim is excessive and questionable. We have to carefully distinguish between computer aid to humans and replacing human judgement and decision-making with computer algorithms.

Chesley (Sully) Sullenberger has allowed himself as the flight captain to be guided by his experience, intuition and common sense to land the plane safely and save the lives of all passengers and crew on board. He was wholly focused on “solving this problem” as he told CBS, the task of landing the plane without casualties. He recruited his best personal resources and skills to this task, and in his success he might give everyone hope and strength in belief in human capacity.

Ron Ventura, Ph.D. (Marketing)

Notes:

(1) “Gut Feelings: The Intelligence of the Unconscious”, Gerd Gigerenzer, 2007, Allen Lane (Pinguin Books).

(2) “Some Assembly Required”, Erin Griffith, Fortune (Europe Edition), 1 July 2016.

 

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