- 31 May 2007
- Working Paper Summaries
Extremeness Seeking: When and Why Consumers Prefer the Extremes
Overview — When can variety be helpful and when can it be harmful? Conventional wisdom suggests that a product provider enhances the overall attractiveness of a set of options by adding more alternatives to the mix. By contrast, Gourville and Soman’s research indicates that in certain, predictable cases, adding more alternatives to an assortment leads consumers to choose either the most basic or the most "fully loaded" product or service, be it a camera, car, cable TV service, laptop, or vacation package in Italy. Key concepts include:
- As the variety of choices available to consumers grows in size and those choices vary in their distinct features, consumers often prefer the options at either extreme—either the basic model or the fully loaded model.
- While getting some consumers to trade up to the "fully loaded" model may seem desirable for a seller, it is not clear that the overall effect of such polarization will be positive.
- Rather than encourage consumers to choose a basic or fully loaded product, product providers may wish to turn an uncertain customer into a certain customer by offering an alternative that best meets the customer's needs.
- Understanding how additional choices have an impact on demand for specific models in a product portfolio is essential for efficient inventory and product line management.
Decision researchers have long been interested in behaviors that deviate from rational choice. Of these, the compromise effect has received considerable attention, with it repeatedly shown that the probability of choosing an item increases when that item is a middling, as opposed to extreme, alternative in a choice set. The term extremeness avoidance has been used to describe the reason underlying this phenomenon. In this research, we argue that extremeness avoidance behavior depends on assortment type, with consumers displaying extremeness avoidance for alignable assortments, but systematically and predictably displaying extremeness seeking for non-alignable assortments. Across three studies, we show the extremeness seeking effect, contrast it with extremeness avoidance, and explore its underlying cause.