Overt or covert? Effect of different digital nudging on consumers’ customization choices

Shouwang Lu, Gong (Gordon) Chen and Kanliang Wang

Nankai Business Review International, 2020, vol. 12, issue 1, 56-74

Abstract: Purpose - This study aims to explore the effect of two digital nudging technologies that is overt digital nudging (ODN) and covert digital nudging (CDN), on consumers’ choices of nudged options in the context of online customization systems (OCS). Design/methodology/approach - This paper designed a 2 (ODN: yes/no) by 2 (CDN: yes/no) full factor between-subject lab experiment in the context of online travel package customization. This paper collected and analyzed the number of nudged options (the intermediate options) of choices among consumers in these four scenarios. Findings - ODN and CDN have positive effects on consumers’ choices of nudged options in online customization (OC). In addition, mixed nudge (a combination of ODN and CDN) has a more significant effect on consumers’ choices of nudged options in OC than using CDN only. Research limitations/implications - This study focused only on the choice behavior of consumers in the customization context and did not analyze their attitude change. The present study used vendor recommendation as the proxy variable of ODN and default option as the proxy variable of CDN. A future study could explore other instances of ODN and CDN. Practical implications - This study explores the effects of digital nudging technologies in the context of OCS. The study provides clear guidance for customization vendors on whether to use digital nudging tools and their combinations, and which tools should be preferred. Social implications - Vendors can adopt digital nudging technology to persuade consumers to choose nudged options. This nudging effect can make consumers’ choices predictable and less uncertain, thus adding profits for vendors. Originality/value - First, the study focuses on the impact of digital nudging on consumers’ choices and enriches the understanding of the impact of customization system design on consumers’ choices. Second, this paper put forward a new classification method for digital nudging and proposed, respectively, the effect mechanisms on consumers’ customization choices. Third, this study explores the effect of combining multiple nudging tools in OC context on consumers’ choices, which deepens the understanding of the interactive effects of different types of nudging tools.

Keywords: Online customization system design; Digital nudging; Consumers’ choices; Lab experiment (search for similar items in EconPapers)
Date: 2020
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Persistent link: https://EconPapers.repec.org/RePEc:eme:nbripp:nbri-12-2019-0073

DOI: 10.1108/NBRI-12-2019-0073

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