Post on 21-Dec-2015
Living on the Edge and In the Instant: Formalizing the Utility of Intense, High-Stake, Real-Time Experiential Consumption
Robert E. Krider
Simon Fraser University
Luc R. Wathieu
Harvard Business School
Extreme Leisure
• Millions of Frequent Participants (U.S.)
– Off-road mountain biking • 0.3 (1993) 2.6 (2002)
– Kayaking / Rafting• 0.5 (1993) 1.3 (2001)
– Snowboarding• 0.6 (1993) 1.6 (2001)
Extreme Leisure
• the US Adventure Travel Society estimatesadventure travel was worth
$245 million in the US in 2002
Extreme Leisure
• U.S. Hang Gliding Association Membership (hang gliding and
paragliding)
• 1980 165• 1990 234• 2000 767• 2002 1688
Extreme Leisure (voyeur department)
• EXTREME: “Denoting an activity in which participants actively seek out dangerous or even life-threatening experiences."
• X-Games—ESPN’s contribution• Skateboarding, surfing, BMX, motocross, MTB,
snowboarding, wakeboarding, rollerblading… • 2002 Summer X-Games VIII garnered 62.7
million viewers• 2003 Winter X-games sponsors: Jeep,
Mountain Dew, Motorola, Taco Bell
Literature• Brannigan, A. and A.A. McDougall (1983). Peril and
pleasure in the maintenance of high risk sport: A study of hang-gliding. Journal of Sport Behavior,
• Scitovsky, T. (1981). The Desire for Excitement in Modern Society.
• Nicholson, J. (1986) Risk Recreation: A Context for developing Client Potential, Journal of Counseling and Development
• Celsi, R. L., R. L. Rose and T. W. Leigh (1993). “An exploration of high-risk leisure consumption through skydiving” Journal of Consumer Research.
Celsi, Rose, & Leigh (1993)Sociocultural approach to skydiving:• ”flow” –total involvement, no mental room left for
anything else; produces euphoria; addictive• safety is paramount• control motive: matching context to abilities• achievement motive: desire to continually learn, to
increase skill level; • insiders and outsiders: impossible for insiders to
communicate emotions to outsiders; participants evaluate risks very differently from outsiders
• Insiders separate controllable and uncontrollable risks.
Objectives
• Develop formal model of voluntary risky consumption behaviour
• Explain and integrate • Use this unexplored /anomalous behaviour
for insights into – managing consumption experiences– Improving understanding of decision
making under uncertainty
Core model: peril control training• Most parsimonious way of making a choice to expose
oneself to a probability of great loss (death) optimal• By incorporating control and skill learning• Controllable perils are function of survival skill::
probability of death is lower for a more skilled participant
• Voluntary activities and involuntary events in the environment are defined by their mix of uncontrollable and controllable peril.
Core model: peril control training
• Two periods:• First period (training peril)–choose activity with uncontrollable
and controllable risk: ie, choose { pu1 , pc1 } [0,1]∈ 2 , where the
Probability of death in period 1 is
P1 = pu1 + pc1
• Second period (environmental peril)-- nature chooses
controllable and uncontrollable peril pu2 , pc2 . Learning:
choosing a larger pc1 in first period improves survival skill, which
decreases uncontrollable risk in second period:
P2 = pu2 + pc2(1 -α pc1)
• Survival Probability
S = (1 – P1)(1 – P2)• Decision objective
• Solution: -uncontrollable peril avoidance:
pu1* = 0
-controllable peril seeking
pc1 * = ½ – (1 – p2u – p2c ) /(2αp2c)
• pc1* is greater with larger α, pc2 and pu2
21 1, 0,1u cp pMax S
Limitations
• Well defined two stage sequence—endogenous training, followed by exogenous peril
• Foresight of exogenous peril probabilities• Linear learning and impact of learning on
survival.• Why doesn’t everyone hang glide?
Survey
• Web survey of members of West Coast Soaring Club (paragliding and hang gliding), MBA students, and undergrads
• Exploratory hypotheses are that WCSC members dislike uncontrollable risks and like controllable risks.
• Questions on appeal of various “risky” activities with various levels of control
• Questions on lotteries to assess relative risk preferences.
Mean appeal to try once0 = very unappealing, 4 = very appealing
2
3
4
5
whitewater kayaking rafting client
WCSC
UG
MBA
Mean Appeal as regular activity0 - very unappealing, 4= very appealling
2
3
4
5
whitewater kayaking rafting client
WCSC
UG
MBA
Likelihood of buying a lottery ticket1= low, 5 = hi
2
3
4
5
a 1-in-one millionchance of w inningone million dollars?
a 1-in-10 chance ofw inning ten dollars?
a 1-in-2 chance ofw inning tw o dollars?
WCSC
UG
MBA
Likelihood of taking a bet1= low, 5 = hi
1
2
3
4
a 50% chanceof losing $100
and a 50%chance of
gaining $100
a 50% chanceof losing $100
and a 50%chance of
gaining $200
a 10% chanceof losing $10
and 90%chance ofgaining $2
a 1 in 1000chance of
losing $1000and 999 in 1000
chance ofgaining $20
WCSC
UG
MBA
Reasons for flying
0
5
10
15
20
25
30
35
40
not at all a bit but Ican livewithout it
it matters it mattersa lot
a wayhuge
reason
N
Socializing with like-minded people
Thrill of exposure tophysical harm
Satisfaction in exercisingcontrol and skill inchallenging situations tokeep yourself safe
Letting the worldespecially non-fliers knowthat you participate in thissport
The physical sensations offlying
Satisfaction of continuallyIncreasing yourcompetence and skill
Reasons for flying (Open-ended )
• Opportunities for learning about nature: weather, birds, micrometeorology, etc.
• the never ending learning process • living on the edge • --------------------------------------------• fulfillment • Absolute escape from other pressures and demands of life -
when I'm flying there is no time to think of anything else and no way out till the flight is done.
• absence of every thing else when flying • Experiencing the air as a different medium (gliding vs. still), 3D
aspect of flying (i.e. 3 degrees of freedom vs.sailing - 2D or driving -1D), scenery, transcending the nature (non-powered flight)
Work in progress
• Eliminate need for foresight of upcoming dangerous event
• Why doesn’t everyone hang glide?
Summary
• Voluntary exposure to peril observed• Focus on control and learning• Core model of peril control training where voluntary
exposure to a probability of death is rational• Exploratory survey supports model• Leading to a deeper understanding of experiential
consumption beyond extreme sports