Graduate Thesis Or Dissertation

Consumer Food Choices: Three Essays on the Importance of Option Saliency, Peer and Expert Information, and Uncertainty

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  • This dissertation includes three essays. In the first two essays, I use experimental and behavioral economics tools to explore the impacts of option saliency, group behavior, expert input, peer information and own experience on consumer demand for a sensory product, in my case, for wine. All the lab experiments and data collection took place in Applied Experimental Economics Lab (AEELab) at Oregon State University. First essay looks at the choice overload, a demand effect that reduces consumer WTP and interest in tasting items when they are part of a larger choice set, in consumer wine tasting and willingness to pay behavior. While choice overload, or choice paradox, has been previously identified in a wide range of settings (Iyengar and Lapper, 2000; Boatwright and Nunes, 2001), competing theories of its causes have been proposed. Proposed explanations for choice overload can be widely described as the ones that focus on the impact of the number of options on search costs (Kamenica, 2008; Kuskov and Villa-Boas, 2010; Malone and Lusk, 2019) and the ones that model consumer decisions as driven by potential regret minimization, or “fear of missing out” (Iyengar and Lapper, 2000; Sarver, 2008; Hepburn, 2007; Milyavskaya et al., 2018). Similarly, some research suggests people are willing to pay for information that would not change their choice if it provides additional support for their preferred choice (Tversky and Shafir, 1992), suggesting a tendency to minimize regret. We use a controlled lab experiment to test these competing theories by explicitly modifying search costs and saliency of outside options, which moderates the extent of potential regret. We find that increasing the saliency of outside options decreases one’s propensity to taste the wines available for tasting and purchase immediately, while changing search costs through sensory descriptions does not affect tasting behavior. My second essay focuses on the relative importance of experts, peer and own evaluations on consumer decision making. This essay comprised of two studies. Study one uses expert and peer evaluations to test the influence of external information on demand for wines consumers have full private information on. We find that higher peer or expert valuation both increase consumer WTP after tasting. Study two test the impact of peer popularity on consumer’s own willingness to pay for the wines they have tasted or not, where the tasting choice is endogenous to consumer preferences. The WTP for tasted wine is further increased by its popularity among peers. On the other hand, we find that peer popularity decreases the WTP for wines consumers choose not to taste, suggesting that peer popularity can have an asymmetric impact on demand, possibly driven by confirmation bias (Zaleskiewicz and Gasiorowska, 2018). My third essay focuses on the timely topic of consumer behavior change during the COVID-19 pandemic. We look at the impacts of a health pandemic on consumer safety perception of the grocery store shopping environment and store choice. We find that liberals are more concern about safety of the grocery store environment over the average weekly food basket price, compared to non-liberals. All three essays focus on the phycological factors which drive the consumer behavior. Behavioral economics is rooted in psychology research, showing that subtle environmental factors can influence decisions and behaviors of consumers. In my research I look at the effects of behavioral economics interventions on food choice and food consumption, which will be a significant part of Agri food sector in the future in terms of marketing innovations, ensuring proper nutrition and food safety, innovation of efficient food production practices/technology, modern retail transformation etc.
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Peer Reviewed
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  • Pending Publication
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  • 2022-06-08 to 2023-07-09



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