The Evolution of Compromise Effect: The Moderating Role of Socially Relevant Information

Research in marketing and consumer behavior indicates that consumer preferences for different alternatives within a choice set are influenced by its composition. Much of this research on choice focuses on decision rules by which consumers select an option among a set of alternatives as if both choices and alternatives were completely independent of any other choice. This implies that choices are analyzed as one shot events, thus time-invariant events. Obviously, this approach disregards correlation among choices (i.e. sequence of non-independent decisions), dynamic nature of information availability: it is highly plausible that over time consumers will become aware of what others consumers have chosen both by interacting with them or simply observing the outcome of their behaviors. For instance, in the case of electronic commerce, over time individuals have the opportunity to find out which is the most popular option among a set of alternatives. This knowlege can, of course, help consumers justify their choices. The purpose of this research is to shed some light on how information availability, which varies over time, might affect decision rules such as the compromise effect. In particular we aim to assess whether information availability and in particular information on social behavior might interact with consumer propensity to use context heuristics to make decision. It should be noticed that the effect of information on others’behavior is assessed in a repeat purchase context. We contend that the fulfillment of social justification by information on other consumers’ behavior would moderate the strength of compromise effect in favor of the most chosen alternative.