Noncompensatory Dyadic Choices

Neeraj Arora (), Ty Henderson () and Qing Liu ()
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Neeraj Arora: Wisconsin School of Business, University of Wisconsin-Madison, Madison, Wisconsin 53706
Ty Henderson: McCombs School of Business, University of Texas at Austin, Austin, Texas 78712
Qing Liu: Wisconsin School of Business, University of Wisconsin-Madison, Madison, Wisconsin 53706

Marketing Science, 2011, vol. 30, issue 6, 1028-1047

Abstract: Whereas literature in marketing shows that individuals often use noncompensatory decision rules, existing research on dyadic choice is based on compensatory models. In this paper we present a dyadic consider-then-choose model that investigates both compensatory and noncompensatory aspects of the joint decision process. The intersection of individual consideration sets at the dyad level gives rise to dyadic decision processes (DDPs) where dyad members are in concordance or discordance about alternatives to consider. We empirically investigate the implications of different DDPs on outcomes such as decision efficiency and dyadic welfare. The methodological approach merges choice experiments with Bayesian statistical models to uncover nuances of the dyadic choice process. Data were collected using a multiphase nationwide study of 265 husband-and-wife dyads. Results across three categories indicate that both concordant and discordant dyads exist. Among concordant dyads, the noncompensatory dyads make quicker decisions that result in higher dyadic welfare. Among discordant dyads, those that restrict their consideration set make quicker decisions that result in higher welfare than those that expand their consideration set. These findings have important implications for buyers looking to maximize dyadic welfare when making joint choices and for sellers making pricing and new product design decisions.

Keywords: group decision making; group welfare; joint choice; choice heuristics; hierarchical Bayes; consideration sets (search for similar items in EconPapers)
Date: 2011
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Citations: View citations in EconPapers (1)

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Persistent link: https://EconPapers.repec.org/RePEc:inm:ormksc:v:30:y:2011:i:6:p:1028-1047

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