Licensing Effect in Consumer Choice

Uzma Khan and Ravi Dhar
Journal of Marketing Research (JMR)
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Executive Summary

Imagine a person who is making a choice between two options, one of which is a relative luxury or indulgent item. Is this person more or less likely to buy the more indulgent option if he or she previously expressed an altruistic intent in a different domain? Most choice research focuses on the decision processes by which consumers choose among a set of alternatives, independent of the manner in which they arrive at the choice. In contrast to this focus on single-shot choices, consumers in the real world often make a series of decisions in which one choice follows another. The authors show that a prior choice that activates and boosts a positive self-concept subsequently licenses the choice of a more self-indulgent option. They illustrate this general idea by examining the choice between options that are relative luxuries and necessities. Specifically, they hypothesize that relative preferences for a luxury option will be higher if people’s prior decisions provide a boost to their relevant self-concept. It is useful to think of this phenomenon as a “licensing effect,” in which a prior intent to be virtuous boosts respondents’ self-concepts, thus reducing negative self-attributions associated with the purchase of relative luxuries.

The article further examines the theoretical precondition and the mechanism underlying the licensing effect. The authors show that the preference for a relative luxury after expressing an initial virtuous intent is attenuated if there is an external attribution for the virtuous act. In direct support of their theory, they also show that a prior virtuous decision boosts the relevant self-concept, which mediates the preference for a luxury option. Finally, the authors show that consumers may be unaware of how their prior decision influences their subsequent choices. In other words, the process underlying the licensing effect may be largely nonconscious.

The findings make contributions in two important areas: First, the authors show how preference among a set of alternatives is systematically licensed by prior decisions and that this effect occurs without explicit intention and awareness. Second, in contrast to previous research on nonconscious effects on behavior, which suggests that preferences assimilate to salient traits or self-identity, the authors demonstrate that an initial altruistic intent that boosts the relevant self-concept can liberate a person to choose a more indulgent option. This has important implications for understanding the effect of priming a self-concept on the direction of subsequent choices.

Uzma Khan is Assistant Professor of Marketing in the Tepper School of Business at Carnegie Mellon University. She is also affiliated with the Department of Social and Decision Sciences at Carnegie Mellon University. Her research investigates sequential decision making and mechanisms of self-regulation. Specifically, she is interested in how people regulate their guilt in consuming indulgent items and the role of past and future choices in such decision processes. Her research has won several awards, including the SCP-SHETH Doctoral Dissertation Award and the American Marketing Association’s John A. Howard Doctoral Dissertation Award.

Ravi Dhar is Professor of Marketing and Director of the Center for Customer Insights at the Yale School of Management. He also has an affiliated appointment as Professor of Psychology in the Department of Psychology at Yale University. His research involves using psychological and economic principles to investigate fundamental aspects about how preferences are formed and constructed to understand and predict consumer behavior in the marketplace. He is also interested in the processes of self-regulation and, specifically, the simultaneous pursuit of multiple goals. He has been a visiting professor at HEC Graduate School of Management in Paris, at Erasmus University in the Netherlands, and at the business schools at Stanford and New York University. He has written more than 25 articles and serves on the editorial boards of leading marketing journals, such as Journal of Consumer Research, Journal of Marketing, Journal of Marketing Research, and Marketing Science.

J Marketing Research, Volume 43, Number 2, May 2006
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Author Bio:

Uzma Khan and Ravi Dhar
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