By Yonat Zwebner, Ph.D., and Rom Schrift, Ph.D.

 

Throughout our lives, we make many decisions in the presence of others, such as deciding which dish to order at a restaurant, or making decisions as part of a group. Aside from being directly observed by other people around us, today, our decision making is subject to more pervasive observation than ever due to technological advances that companies use to track, monitor, and analyze our offline and online marketplace activities. These technologies allow firms not only to record and track transactions, but also to analyze our responses to their offerings even before we make a decision.

Online retailers (e.g., amazon.com, Netflix) often use messages that highlight that recommended products are based on consumers’ previous purchase choices (“inspired by your purchases”) or based on their deliberation process (“inspired by your browsing history”). These messages make it clear to consumers that both their final purchase and pre-purchase activities are being monitored and tracked, presumably to customize their future shopping experiences.

Given the pervasive extent to which consumers are observed in the marketplace by other individuals and by online platforms, and given the rise in consumers’ privacy concerns associated with such practices, understanding consumer reactions to being observed in the pre-decisional stage becomes an important topic.

In a recent series of studies, we compared consumers’ responses to observations of two stages in consumers’ decision-making—pre-choice (deliberation and preference development) and purchase (disclosure of choice) —and found that observation in the pre-choice stage triggered greater aversion than did observation in the purchase stage. Furthermore, observation of the pre-choice process changed consumers’ preferences in specific ways: In order to evade being observed in the preference-construction stage, consumers distorted their preferences and behaved in a manner that enabled them to resolve the decision with as little conflict as possible — by choosing default options or making no purchase at all. This was true even when consumers merely had an expectation that their decision making would be observed. We also found that these concerns are more pronounced when the observation occurs in real time.

Distorting Preferences to Avoid Observation

In our first set of studies, we created a relatively realistic setting for participants on campus, where we could study purchase decisions with real monetary consequences. Participating students received a $1 bill and were told that they could use the money to purchase products from a nearby table that held 10 baskets containing different products with a value of 10 cents each, or not purchase anything and walk away keeping the $1 bill. When each participant walked up to the experimenter to receive an explanation of the study, an ostensible bystander (who was a confederate) also asked to participate in the survey, and was told to wait. The confederate waited either near the table containing the products observing the participant deliberating, or with their back to the table, or near the experimenter, creating three conditions of social observation (observation of the deliberation process, no active observation, and observation of the final decision). We found that in contrast to the latter conditions, when participants were actively observed during their deliberation process near the table, they preferred to forgo the choice altogether, and keep the $1 without purchasing anything.

To see whether the mere expectation of being observed during the choice construction phase had the same effect as active observation by the bystander in our first study, we conducted a second study in our lab, where participants were entered in a raffle for winning a t-shirt. Participants were told that if they won, they could receive a default t-shirt with the university’s standard logo, or design their own t-shirt (selecting the color, logo, style, and neckline of their choice). Some participants were told that if they choose to design their own t-shirt, the research assistant would observe them as they chose the elements of their design. We found that this group of participants, who knew in advance that their t-shirt design process would be observed, were more likely to forgo the personalized design option and choose the default t-shirt.

In another set of studies, we examined online observation and compared consumers’ aversion to being tracked online in two conditions: when their decision making process was being tracked vs. when their final decision was tracked. Our findings confirm that like offline consumers, online consumers are averse to platforms that track their pre-choice phase (deliberation process), and their aversion is stronger than when the platform tracks their final decision only. Moreover, consumers were significantly less interested in using an online platform that tracked their decision making process.

Threats to Autonomy and Privacy

But what was specifically causing this aversion to observation? We found that people who are observed when developing their preferences and choices feel that their sense of autonomy is threatened. Even if the observing entity will not learn what consumers end up choosing, the mere act of being observed during the preference-construction stage makes consumers feel exposed to outside influence, which undermines their sense of decision autonomy.

We also explored whether these concerns of autonomy would be the same when people knew that their deliberations were being tracked in real time, compared to when people knew that their deliberations would only be recorded and observed at a later time. In this set of studies, we found that the aversion is not about people being annoyed by the observation per se, rather it’s the real-time live observation that undermines people’ sense of autonomy in making the decision.

Implications

Social observation not only triggers privacy concerns relating to how companies use and share their information, but also concerns relating to consumers’ ability to independently reach a choice, free of external influence. While there may be some clear benefits for marketers to observe consumers’ deliberation stage, our findings suggest that there are also potential downsides that companies should consider when employing such practices. First, observation decreases consumers’ liking and usage intentions of platforms that observe the decision-making process. Second, it leads consumers to terminate their decision by avoiding purchase or by choosing default options. Companies should take these into account when deciding whether the benefits of observing consumers will outweigh the potential associated costs.

Yonat Zwebner

Yonat Zwebner

Yonat Zwebner is an assistant professor of marketing at the Arison School of Business, IDC Herzliya. Prior to joining IDC, she was a Post-Doctoral Research Fellow at the Wharton School, University of Pennsylvania. She holds a PhD in Marketing from the Hebrew University of Jerusalem. Her research examines consumer behavior focusing on social influences. Yonat’s research has been published in top-tier academic journals, has won several awards, and has received massive media attention.