Time-Inconsistent Preferences and Consumer Self-Control
Authors: Stephen J. Hoch, University of Chicago; George F. Loewenstein, University of Chicago
Publication: Journal of Consumer Research
Focus Area: Persuasion, Decision Making, Prevention
Relevance: Fraudsters are essentially selling a product and often rely upon impulsive behavior to engage their target in the purchase (or a step toward purchasing, like agreeing to receive mailed information). This paper provides analysis of the interaction between desire and willpower, with explanations of some strategies that people use to avoid making impulsive decisions.
Summary: Certain situations can elicit “extreme impatience” in consumers who would otherwise make evenhanded judgments of the benefits and costs of a given purchase.
- Time-inconsistent choices are those that would have been made differently if “contemplated from a removed, dispassionate perspective.” Self-control is a struggle between desire and willpower, and successful self control can be achieved by reducing desire or overcoming desire through strong willpower.
- Proximity of a desired object – either physically or in time – increases desire and impatience for that object.
- Consumers can reduce desire by distancing themselves from the object of their desire. Other strategies include avoiding situations in which they make impulsive decisions, delaying a decision, distracting themselves, or substituting another, smaller reward.
- Consumers can increase willpower by committing themselves to a behavior other than the one they desire; for example, leaving credit cards at home to prevent impulse purchases. People also think about the benefits of delaying an impulse, add up the accumulated costs of a series of decisions, appeal to a higher power, and reflect on regret and guilt as tools – both conscious and subconscious – to increase willpower.
Author Abstract: Why do consumers sometimes act against their own better judgment, engaging in behavior that is often regretted after the fact and that would have been rejected with adequate forethought? More generally, how do consumers attempt to maintain self-control in the face of time-inconsistent preferences? This article addresses consumer impatience by developing a decision-theoretic model based on reference points. The model explains how and why consumers experience sudden increases in desire for a produce, increases that can result in the temporary overriding of long-term preferences. Tactics that consumers can use to control their own behavior are also discussed. Consumer self-control is framed as a struggle between two psychological forces, desire and willpower. Finally, two general classes of self-control strategies are described: those that directly reduce desire, and those that overcome desire through willpower.