The Attraction&Compromise Effects Under Reference Group Influence

Consumer choice is a process that a person chooses a product from a series of possible selected brands (Kardes2003). In the study of consumer behavior under given production set, researchers found that a certain product sequence can cause abnormal choice behaviors happen. These choices violate basic economic assumptions.What is more important, the phenomenon is not an accidental, but with high stability. Some literatures named these abnormal choice phenomena as attraction effect, compromise effect, perceptual focus effect and so on. In this dissertation, they are collectively known as choice set effect.There is no confirmation on perceptual focus effect in previous research.The dissertation mostly focuses on attraction effect and compromise effect. Attraction effects and compromise effect have been confirmed by many literatures. In this dissertation, meta-analysis method has been applied to prove that combined effect statistics (average effect value) has a great statistical significance, and Egger’s deviation coefficient indicates that there is no obvious publication bias in the results of literatures, but there are small sample biases, it may overestimate or underestimate effect value.First of all, the dissertation constructed3basic models of attraction&compromise effects influenced by reference groups. It was based on the theory of cumulative expectation established by Tversky et al.(1992) and the theory of reference point. In this model, it is the essence of consumer’s behaviors influenced by referenced group that consumer’s sanction to the reference point from reference group affect consumer’s choice to his own products reference point. This effecting process is also a process of "adjusting" of consumer’s choice behaviors. Two expended models are built according to previous research on reference group and perspective theory.(1) There is difference for consumer’s sanction influence under information influence and normative influence;(2)There is significant difference for influence degree of consumer’s reference point under different types of information influence and normative influence.The dissertation put forward relevant hypotheses based on the model, according to consumer’s affective responses and cognitive response and behavioral responses to the reference groups and products from information influence level and normative influence level.In the study of the Attraction and Compromise Effects under information influence, the empirical results show that there is no attraction effect when the group information is in favor of competitor(negative), and it also doesn’t exist for polarization phenomenon that have a preference for competitor. But in compromise effect situation, negative information not only eliminates the compromise effect but also leads to the polarization phenomenon. It shows that attraction effect and compromise effect is significantly different. The cognitive divergence of target products from two kinds of effects based on positive information have proved the difference between these two kinds of effects again: In attractive effect situation, consumers prefer to noncompensatory strategies.Positive information helps consumer edit some attribute quickly, and they can take the dominant products as a chance and trade off as the information is consistent.Therefore, attraction effect significantly increases; But, in compromise effect situation, consumers are more likely to take compensatory strategies.They pay more attention on the complementary of the attributes. Positive information increase cognitive of noncompensatory strategies consumers to target products.But with the descending of sensitivity, consumers still tend to take compensatory strategies. So the ascension of compromise effect is not significant.Empirical studies confirm that influences of negative information to consumer are more significant than positive information,no matter it is revealed preference or cognitive hidden behind preference. This phenomenon could be mainly started in the negative influence, consumers are(1)loss aversion and (2) taking less system strategies and more heuristic strategies(Pham and Higgins2005).In the study of the attraction and compromise effects under normative influence, a special phenomenon in China "face" is introduced in the study to secretly match the normative influence and is treated as an important explanatory variable of the change of the participants’behavior and cognition. In this study, a reference point is given by the group norm. If the choice of the consumer is consistent with the reference point, his choice is "up to face" behavior, if higher than that of the group norm, his choice is "fight for face" behavior, instead, it is a kind of " losing face’" behavior. Data analysis indicates that, whatever product the reference group regards as the reference point, it is obvious to choose the set effect. However, the influence degrees of the probability of the choice of the target product have significant differences. When the group norm takes competitor A as the reference point, the selection of the set effect is not significantly affected. The conclusion can be extended that the Thrift Society will not affect the consumption of luxury goods. When the group norm takes product B and C as the reference point, the choice of the set effect significantly increases, but with different reasons. When the group norm takes the lure product C as the reference point, the attraction effect increases because the choice of B is "up to face’" in the situation of the attraction effect. While in the compromise effect, the promotion of the compromise effect is for the reason that the competitive product is farther away from the reference point of the group norm than the eclectic product. At this moment, the overall probability of the selection of the compromise products decreases significantly and the consumer preference switches to the preference for luxury products, which is called the "Polarization" phenomenon. These studies show that, compared with "fight for face’" products, the consumers are more likely to choose the "up to face" products and show strong resistance to the "losing face" products. All the psychological reactions lead to the changes of the choice of set effect.In the study of the attraction effect, although B is the dominance of C and there’s no significant difference of the subjects’perception of face when they are choosing products B and C, they will still follow the group norm (product C)"blindly" to abandon the cheaper product B which is of the same quality. At the same time, price is no longer the basis of the consumers’ purchase of the products. From a personal point of view, their buying behavior obtains social relationship benefits. However, from the social perspective, this is an abnormal consumption mode of blind competing. In addition, from the view of the cognitive change of the subjects, the group norm of the "competing" will also inhibit their desire to buy. which would do harm to the sustainability of consumption.According to the outcome of the study of "the reference group influences the regulation variables" taken by Lord et al.(2001), three variables are introduced in this thesis as the regulation variables for the information effect:Purchase-Decision Involvement, the difficulty of the decision and Consumer Susceptibility. The "decision-making complexity" has not been verified, which indicates that the compromise effect is not so simple as the explanation of Simonson (1989). It is a more complex cognitive process (Dhar&Simonson,2003). Two variables,"Consumer Susceptibility (code)" and "ATSCI" are introduced to the normative influence. The results of the research show that both of the two variables have significant positive moderating effect.The Main innovations in this paper have five points.(1) it’s a change for the traditional reference group research paradigm about study the effection of the reference group which is discribed by the reference point and revealed preference. It provide the further research on the reference group influence a new perspective.(2) The study about attract effect and compromise effect which based on a single product reference points expand into "product&social influence" reference point.3) It explains and proves the different effect about consumer groups revealed preference with group norm of different reference point, and it reveals the reason of the difference.(4) A limited rational behavior is revealed in the paper through the attract effect and the compromise effect.(5) The compromise effect and attract effect are heterogeneic through the analysis about the difference of consumer cognition with compromise effect and attract effect. The research not only confirmed the relations about frugal consumptive idea and luxury consumptive idea from the macroscopic level.but also provides strategy guide for enterprise market practice from the micro level,such as new product development, product positioning, advertising appeal based on attract effect and compromise effect.This research also has some disadvantages, such as lack of the analysis on the choice of consumer reasonable reference points, concealling the brand name in the study, all of the experiment samples are collect from students.these disadvantage will be make up in further study.