The Fun and Function of Uncertainty: Uncertain Incentives Reinforce Repetition Decisions

Luxi Shen, Christopher K Hsee, Joachim H Talloen, Gita V JoharEditor, Amna KirmaniEditor and Stijn M J van Osselaer

Journal of Consumer Research, 2019, vol. 46, issue 1, 69-81

Abstract: This research studies repetition decisions—namely, whether to repeat a behavior (e.g., a purchase) after receiving an incentive (e.g., a discount). Can uncertainty drive repetition? Four experiments, all involving real consequences for each individual participant, document a counterintuitive reinforcing-uncertainty effect: individuals repeat a behavior more if its incentive is uncertain than if it is certain, even when the certain incentive is financially better. This effect is robust; it holds in both lab and field settings and at both small and large magnitudes. Furthermore, the experiments identify two theory-driven boundary conditions for the reinforcing-uncertainty effect: the effect arises (a) only if the uncertainty is resolved immediately and not if the resolution of uncertainty is delayed, and (b) only after, not before, one has engaged in repetitions. These results support a resolution-as-reward account and cast doubt on other explanations such as reference-dependent preferences. This research reveals the hidden value of uncertain incentives and sheds light on the delicate relationship between incentive uncertainty and repetition decisions.

Keywords: risks and uncertainty; motivation; gamification; customer retention; intermittent reinforcement; happiness; gambling; variety seeking; prediction; performance; goal pursuit; behavioral decision theory; incentive design; loyalty program (search for similar items in EconPapers)
Date: 2019
References: Add references at CitEc
Citations: View citations in EconPapers (10)

Downloads: (external link)
http://hdl.handle.net/10.1093/jcr/ucy062 (application/pdf)
Access to full text is restricted to subscribers.

Related works:
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:oup:jconrs:v:46:y:2019:i:1:p:69-81.

Access Statistics for this article

Journal of Consumer Research is currently edited by Bernd Schmitt, June Cotte, Markus Giesler, Andrew Stephen and Stacy Wood

More articles in Journal of Consumer Research from Journal of Consumer Research Inc.
Bibliographic data for series maintained by ().