An Alternative Decision-Making Paradigm: the Maintenance of Mental Health

An Alternative Decision-Making Paradigm: The Maintenance of Mental Health

James W. Gentry

University of Nebraska-Lincoln

College of Business Administration

Lincoln NE 68588-0492

Tel: 402-472-3278

Fax: 402-472-9777

Email:

Suraj Commuri

University of Albany

Marketing Department

College of Business Administration

1400 Washington Avenue

Albany, NY 1222

Tel: (518) 442-4954

Fax: (518) 442-2568

E-mail:

Mariam Beruchashvili

California State University-Northridge

College of Bus Adm

18111 Nordhoff St.

Northridge CA 91330-4651

Email:

An Alternative Decision-Making Paradigm: The Maintenance of Mental Health

James W. Gentry, University of Nebraska-Lincoln

Suraj Commuri, University of Albany

Mariam Beruchashvili, California State University-Northridge

ABSTRACT

Marketing and, to a lesser extent, Consumer Research have been limited by their basic foundation coming from Economics and by its normative emphasis. Despite Consumer Research’s broadened scope fostered by the incorporation of perspectives from Psychology, Sociology, Anthropology, and other disciplines, we argue that the perspectives of consumer decision making have been based, implicitly if not explicitly, upon (modifications of) Economic theory. Hirschman (1993) argued that a cooperative perspective should be considered as well as a competitive one. We extend that by arguing that a mental health perspective should be used to evaluate decision making and, more importantly, to frame our expectations for consumer research.

INTRODUCTION

Do consumers make decisions well? There have been on-going debates in many disciplines as to whether we should look at human decision making as good and adaptive or lousy and full of persistent biases. Klayman (2003, p. 3) argues that “It’s an inappropriate question, and we shouldn’t be debating;” instead, he advocates studying how to help people achieve their goals, rather than whether judgment is better modeled by shortcomings or achievements. This issue is especially pertinent to Marketing (the dominant discipline of Consumer Research at this point in time), which has its own roots primarily in Economics with its emphasis on ‘should’ rather than ‘how.’ For example, consumer economists have a long history of faulting consumers for poor decision processes. Whether we admit it or not, a normative perspective still permeates much of our thinking in consumer research. It is time for aparadigm shift away from any semblance of an optimization mindset to a more meaningful perspective in terms of how we approach research issues.

This call for a paradigm shift is similar to that by Hirschman (1993), who noted the masculine, competitive perspective embedded in Economics and instead advocated inclusion of a more feminine,cooperative perspective. To see the value of her advice, consider the area of family research within consumer research. Until recently, it has focused on relative influence as though decision making was a zero-sum game (hers or his, or less frequently, his, hers, or the child’s). Isn’t there shared influence and the acknowledgment of empathy on the other family members’ parts? Might not we find it if we looked for it?

Rather than the maximization of individual subjective expected utility, what decision criterion should we use as a basis for evaluating whether consumers are being successful in meeting their goals?Utility itself is a step in the right direction, diverting us from the maximization of payoffs by noting that our utility for money is usually not linear. Kahneman and Tversky (1979) moved us further by focusing on value in Prospect Theory as opposed to utility. Further, they touch tangentially on a mental health perspective when they discussed the need to reconcile losses; the notion of “making peace” with one’s losses could imply a concern for one’s mental well-being.Some have proposed decision criteria such as happiness (DesMeules 2002) and subjective well being (Ahuvia and Friedman 1998) as alternative perspectives. We propose a maintenance of mental health perspective (MHP), based on the notion that consumers’ decision-making is predicated upon an inclination to simultaneously reduce the effort and the possible dissonance associated with a decision. The World Health Organization defines mental health “as a state of well-being in which every individual realizes his or her own potential, can cope with the normal stresses of life, can work productively and fruitfully, and is able to make a contribution to his or her community.” Thus, we assert that a consumer’s primary goal is not necessarily to maximizea decision outcome, but also to minimizethe discomfort associated with the process and the outcome of a decision. For example, one tactic which consumers use to minimize discomfort is to reinterpret their experiences, decision processes, and the allied circumstances by placing the outcome in the best light possible. Research which helps us understand consumers’ cognitive processes is beneficial, but possibly short-sighted if we are not concerned with their emotional stability as well.

The MHP differs from the economic perspective in a fundamental manner – in the MHP, there is no normative model of decision making. In other words, while there are universally optimal and sub-optimal approaches under the economic perspective, a decision is optimal under the MHP perspective when it fits the mental health goals (see above) of decision makers, even if such goals are not congruent with any normative models of mental health. Further, the inclusion of a concern for emotional stability is expected to facilitate the inclusion of social contexts into our research perspectives and reduce the likelihood that we will view markets as interpersonal vacuums as Frenzen and Davis (1990) asserted that economists have. A comparison of the MHP with the economic perspective and a “happiness” perspective is shown in Figure 1.

We will evaluate findings from consumer decision process research from the perspective of one maintaining one’s mental health as opposed to one maximizing one’s

Figure 1

Comparison of Various Decision Paradigms

Economic Perspective / Happiness Perspective / Mental Health Perspective
Information Search / One way to optimize utility is better than all others and it is known. All information required to optimize utility that way is required, though the costs of search are considered as well. Search costs are always negative. / One way gives you more happiness than all other ways known. All information required to proceed in that way is required, unless one is unhappy with the search process. Search costs can be ignored if one enjoys the process. / Information search ends when it is no longer worth the decision maker’s effort to search for that information. Information gathered up to this point is all the information required to make a decision. Far more information than necessary can be obtained when one enjoys the process.
Information Use / Information must be used in conformance to the normative model. For example, representativeness should not be valued more than probability. / Processes that lead to an invariable notion of happiness will be preferred over others. / Information does not have to be used linearly, but iteratively until a tolerable decision can be reached.. Redundancy may actually be preferred to independent forms .
Decision Process / Well specified processes are to be used, most likely compensatory models unless time pressures are such that heuristics are more efficient. / Decisions are made in a relatively simply manner unless one finds happiness in dealing with the details. / There are high involvement situations in which Accuracy Goals exist, and implicit tradeoff models are used. More commonly, we have the semblance of the accumulation of evidence to confirm a choice already made.
Post Decision / There is no value to further decision making once the decision in made. / Reinterpretation of the decision outcome takes place in order for it to be seen as palatable. / Continued information search takes place, but biased in nature so as to confirm the decision made. Outcomes are reinterpreted as being acceptable.

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assets, and then note that the anomalies make much more sense from a mental health perspective rather than from a decision theoretic one. We are not advocating that we completely ignore cognitive concerns, but rather that we also consider non-cognitive elements that contribute to our emotional stability.

This proposed shift in the decision-making paradigm allows researchers to approach interesting topics without traditionally preconceived expectations as to what we are going to find. Let us consider family research in Marketing once again and look at the role of Hirschman’s admonition to look for cooperation in addition to competition. Reviews of family research (i.e., Commuri and Gentry 2000) have been harsh in terms of the failure to investigate systematically the dynamic interactions in the family. Research cited as exemplary was in fact conducted within traditional competitive expectations. For instance, considerPark’s (1982) classic “Muddling Through” article which found that spouses try to maximize their own utility functions while at the same time trying to maintain harmony in the household (we would suggest that harmony maintenance has strong links to a maintenance of mental health perspective). We give credit to Park for being able to recognize the existence of a need for harmony; we also note that, at the time, Park was one of the few Marketing scholars raised in a collective culture, which no doubt facilitated this recognition.

A second exemplary piece is that of Corfman and Lehmann (1987), which found a lack of conflict among spouses despite selecting stimuli that maximized the differences in preferences for each couple. More recent efforts (Epp 2008; Epp and Price 2008) have seen researchers investigating individual, relational, and collective identities within the family and finding their ability to make decisions that satisfy no one family member perfectly, but yet satisfy all family members amazingly well. Such findings would not be possible using the “family as sum of its parts” approach that hasevolved in family research under the dominant competitive paradigm. Additionally, Commuri and Gentry (2005) found that Resource Theory (based on the notion that whoever generates the most resources will be the decision maker, a notion more equity-based than egalitarian) did not explain decision processes in households where the wife was the chief wage earner. Instead, resources were allocated so as to create the appearance that the husband handled the “necessary” expenses such as the mortgage from his income,thus allowing him to maintain his image as “provider.” Family research in Marketing has become richer with the frequent incorporation of qualitative data collection procedures.We suggest that this change was facilitated less by the inclusion of qualitative data procedures than by Hirschman’s great grasp of the (now) obvious, that not all consumer processes are dictated by competitive perspectives.

WHY A MENTAL HEALTH PERSPECTIVE?

What can be gained by investigating decision making from the perspective of one seeking to maintain one’s mental health? Zaltman (2000, p. 426) notes that one purpose of human consciousness is to maintain physical and mental well-being, and that “the consumption of many goods, services, and ideas is consciousness’s crutch for enhancing physical and mental well-being.” We agree with Zaltman (2000, p. 428) that consumer researchers should “go off the beaten path” in the hope that a new perspective might help us recognize as of yet unseen happenings and interpretations. This section will summarize certain findings in consumer research that can by explained better from a mental health perspective.

The Certainty Effect

In their Prospect Theory article, Kahneman and Tversky (1979) discussed the Certainty Effect, or the phenomenon that people overweight outcomes that are considered certain relative to outcomes that are merely probable. They also discuss probabilistic insurance, which they show to be superior to regular insurance. It is understandable that all forms of commercial insurance have a negative expected payoff to an honest consumer, and that cutting that negative amount by half would be economically beneficial. Somehow, though, there is limited face validity for paying half the premium to get a 50-50 chance of coverage (after paying the other half of the premium) should the insured-against event occur. At least, we have noticed no movement by decision theorists to go into business offering probabilistic insurance in the marketplace.

The desire for certainty certainly supports the editing processes incorporated in Prospect Theory, which see very small probabilities being converted to zero. One author’s daughter (when quite young) became extremely anxious upon seeing an advertisement for a smoke alarm, as she was very certain that her house would burn in the short run. Somehow a calm discussion of the very small probability of a fire did little to soothe her. As adults, we have learned to cope with such worries by discounting (often to a probability of zero) the likelihood of such disasters.

The certainty effect makes great sense to many of us, yet it must have come as a shock to early normative decision theorists studying how people handle uncertainty, probability, and risk. Possibly this effect would have been found far earlier the investigation been approached from maintenance of mental health perspective.

Certainty may be preferred even when faced with a loss of freedom of choice. For example, Gilbert and Ebert (2002) found that participants who had a decision-reversal option were actually less satisfied with the outcomes of their decision than those whose decisions were irreversible. The availability of the option to change their minds in hope of improving their lot apparently opens them to the possibility of generating dissonance; thus, they see themselves as being more content when they have no choice but to live with the results of a made decision.

Perhaps the only true certainty in life is that it will end. Blaise Pascal offered the classic argument for believing in an afterlife: if you believe in God and turn out to be incorrect, you have lost nothing—but if you disbelieve, and God exists, you lose everything. Thus, the implication was that as long as you had a non-zero probability for the existence of God, no matter how small, the consequences made the expected value infinite. Death has not been a matter of much interest in consumer research, yet its consistent proximity makes itself known from time to time, with devastating results. As one of the few consumer researchers to consider Death, Turley (2005, p. 68) noted that “100 percent of consumers continue to die. Put another way, all consumers are on death row. They may not be aware of it; they may hope to cheat death by behaving as though they are simply doing life…One thing is certain though—nobody gets his or her sentence commuted to life.” A maximization of wealth perspective provides almost no insight into the processes that consumers use to background one’s mortality, or as Turley (2005, p. 72) phrased it, “to see how consumers have succeeded in enabling themselves to live as though there were no death.”

Understanding the mechanisms humans use to maintain their mental health in the face of the certainty of death may shed light on consumer decision processes that have been hindered by the implicit application of the dominant economic paradigm. In passing, we should note that Sex, as well as Death, has been largely ignored in consumer research, but might fit well within a mental health maintenance perspective.

The Status Quo (Endowment) Effect

The fact that people often demand much more to give up an object than they are willing to pay to acquire it was labeled the Endowment Effect by Thaler (1980) as well as the Status Quo Effect by Samuelson and Zeckhauser (1988). An early example of this anomaly was an experiment involving a coffee mug. One-third of the subjects were Sellers, who were given the mug and then asked to name a price at which they would be willing to sell it. Another third were Buyers, who were asked how much they would pay for it. The last third were Choosers, who were asked, for sequential prices, whether they wanted the mug or that amount of money. Given that all three processes are commonly used to determine indifference curves, economists would expect similar amounts of money to be chosen. However, the median reservation prices were Sellers $7.12; Choosers $3.12, and Buyers $2.87. Thus, possessing an item, even for a very short period of time, increases its value to its owner. The study has been replicated numerous times with similar results. For decision theorists, this is an anomaly.

This may make far more sense for someone concerned with one’s mental health.For a consumer, a possession is known and familiar. Over time, objects may take on symbolic meanings and trigger memories of good times in the past or represent loved ones now departed. The observation that recent acquisition of an object starts this possession evaluation escalation is a bit startling, but should it be? The loss aversion component of Prospect Theory may be hard to justify from an economic perspective, but much less so from a mental health perspective. Inertia is a very real human phenomenon, and a body at rest will tend to stay at rest. Change is more often avoided than sought. Even in Western cultures with stronger Promotion leanings than Prevention orientations (Higgins 1987, 1997),existing possessions offer security that potential purchases may not. Research focused on risk handling has strong economic roots and consequently has a pro-innovation, pro-change bias underlying it; however, innovation-resistance may well be the more likely phenomenon at work (Ram and Sheth 1989; Sheth and Ram 1987). Had the status quo been given more merit in the first place, researchers might now have a much richer understanding of the complex processes underlying the Endowment Effect.